The Iowa Court Of Appeals Is Smarter Than A Jury And Other Lessons From Smith v. Iowa State

On Wednesday the Iowa Court of Appeals issued its decision in  Smith v. Iowa State and State of Iowa.  Smith is arguably the first actual statutory whistleblower case that has gone to trial in Iowa.   The case was brought under Iowa Code 70A.28.  That’s a special law that provides whistleblower protection for public employees, like an ISU employee.

Dennis Smith sued ISU and the state after he was fired.  He claimed he was fired in retaliation for blowing the whistle about mismanagement and financial issues by other ISU employees and officials.  The jury agreed with Mr. Smith and he was awarded a substantial wrongful termination verdict against ISU and the state.  They then appealed the verdict.

The Smith case is noteworthy for several reasons.  First, whistleblower claims are rare, and successful ones are even more rare.  Not all “whistling” is protected under the public employee whistleblower statute.  Rather, protection from whistleblowing only arises if “the employee reasonably believes the information evidences a violation of law or rule, mismanagement, a gross abuse of funds, an abuse of authority, or a substantial and specific danger to public health or safety.”

Second, the Iowa Court of Appeals substituted its judgment for the jury’s.  That’s also an extremely rare event.  Normally, when a jury speaks trial judges and appellate judges bend over backwards to uphold the jury’s verdict.  That’s why appeals from adverse jury verdicts fail over 90% of the time.  This is especially surprising in a wrongful termination case like Smith given that for decades Iowa’s appellate courts have been drilling into our heads that the reason for a person’s termination (i.e., “causation”) is generally a jury question.  So it seems odd that in Smith the jury rules on an issue (causation) that is generally for the jury but is then overturned by a three-judge appellate panel.  

Third, the Smith decision provides an important lesson about causation in wrongful termination cases.  Lawyers for employees in wrongful termination cases have to play a game of “connect-the-dots.”  Unless the actions complained of (the retaliation) are connected to the protected activity (whistleblowing in the Smith case), the employee loses.  It’s not enough that bad things are happening to an employee at the same time the employee is engaging in protected conduct.  There needs to be proof of cause-and-effect.  In Smith the Iowa Court of Appeals determined that he offered insufficient proof that his firing and the other retaliatory action against him was connected to his whistleblowing, so he lost.  

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