Can a female employee terminated because her employer’s wife was threatened by her relationship with the male employer sue for sex discrimination?

Answering the question for the second time, the Iowa Supreme Court unanimously said “no.”

Melissa Nelson was 20 years old when Dr. James Knight, a dentist, hired her to be a dental assistant in his practice. Over the next 10 years the two built a personal relationship that occasionally crossed the line of propriety but was not sexual. Both married with children, Nelson and Knight would text each other about family issues.

But Knight also sent questionable texts, wondering how often Nelson had orgasms. In the office he occasionally complained that her clothing was too tight and “distracting,” noting that if she saw his pants bulging, she would know her clothing was too revealing. When Nelson made a statement about her infrequent sex life, Knight responded, “[T]hat’s like having a Lamborghini in the garage and never driving it.”

When Knight’s wife – who also worked in the dental office – discovered the two texted after hours, she insisted that Nelson be terminated, calling her “a big threat to our marriage.” Although Knight acknowledged that Nelson was the best assistant he ever had, he fired her, admitting that he feared he would try to have an affair with her if she kept working in the office.

She filed suit, alleging sex discrimination in violation of Iowa state law. Had she been male, Nelson claimed, she would never have been seen as a threat by Knight’s wife and terminated. Importantly, she did not allege that Knight committed sexual harassment or that she was subject to a hostile work environment.

But the court concluded that Knight’s conduct did not amount to unlawful sex discrimination.

“Title VII and the Iowa Civil Rights Act are not general fairness laws, and an employer does not violate them by treating an employee unfairly so long as the employer does not engage in discrimination based upon the employee’s protected status,” the court said.

The court distinguished between “an isolated employment decision based on personal relations (assuming no coercion or quid pro quo) even if the relations would not have existed if the employee had been of the opposite gender and a decision based on gender itself. In the former case, the decision is driven entirely by individual feelings and emotions regarding a specific person. Such a decision is not gender-based, nor is it based on factors that might be a proxy for gender.”

Knight’s decision to terminate Nelson was exactly that, the court said: a decision driven entirely by individual feelings and emotions regarding a specific person.

Allowing Nelson to pursue her claim would open the floodgates to sex discrimination suits, the court noted, by allowing “any termination decision related to a consensual relationship to be challenged as a discriminatory action because the employee could argue the relationship would not have existed but for her or his gender.”

Nelson contended that Knight’s position would allow employers to justify adverse employment actions by simply pointing the finger at their spouses. But pretext would be uncovered, the court said, and in this case, it was undisputed that Nelson lost her job because of the parties’ relationship and the wife’s demand.

It would also be ironic to allow Knight to avoid liability by terminating her out of fear that he might commit sexual harassment, Nelson pointed out. But the court said that “an isolated decision to terminate an employee before such an environment arises, even if the reasons for termination are unjust, by definition does not bring about that atmosphere.”

“[T]he issue before us is not whether a jury could find that Dr. Knight treated Nelson badly. We are asked to decide only if a genuine fact issue exists as to whether Dr. Knight engaged in unlawful gender discrimination when he fired Nelson at the request of his wife,” the court said. “[W]e believe this conduct did not amount to unlawful discrimination.”

To read the decision in Nelson v. James H. Knight DDS, click here.

Why it matters: The court had reached a similar conclusion in December 2012, but granted Nelson’s motion for rehearing and vacated its original opinion. The court’s original decision received a great deal of publicity, mainly negative, with critics noting that an all-male panel of judges agreed that a woman could be an “irresistible temptation” in the workplace. The new opinion takes great pains to emphasize the personal relationship between the parties, as well as the limits of the decision, noting that Nelson’s suit made no allegations of sexual harassment or a hostile work environment claim. “Also, when an employer takes an adverse employment action against a person or persons because of a gender-specific characteristic, that can violate the civil rights law,” the court cautioned. “The record in this case, however, does not support such an allegation.”