JEFFREY GEORGE v. D.W. ZINSER COMPANY
No. 07–1495
IN THE SUPREME COURT OF IOWA
Filed March 13, 2009
James H. Carter, Judge
On review from the Iowa Court of Appeals. Appeal from the Iowa District Court for Linn County.
Matt J. Reilly of Eells & Tronvold Law Offices, P.L.C., Cedar Rapids, for appellant.
Charles A. Blades of Scheldrup, Blades, Schrock, Sand, Aranza, P.C., Cedar Rapids, for appellee.
After noticing his employer’s failure to take certain required safety precautions during lead abatement jobs in violation of Iowa’s Occupational Safety and Health Act (IOSHA),
I. Background Facts and Prior Proceedings.
On January 18, 2007, Jeffrey George filed a complaint with the Division, alleging his employer, D.W. Zinser, violated provisions of IOSHA. The complaint arose out of violations George witnessed while performing lead abatement jobs for D.W. Zinser in September and October 2006. As a result of a subsequent investigation, D.W. Zinser was cited for eight serious IOSHA violations and assessed penalties on February 8, 2007.
On or around January 23, D.W. Zinser learned IOSHA complaints had been filed against the company. Michael Zinser left two messages on George’s voicemail that day indicating they needed to speak as soon as
In March, George filed a complaint with the Division alleging he was discharged in retaliation for reporting unsafe working conditions. On April 4, the Division dismissed George’s complaint. George appealed, and the interim labor commissioner affirmed the dismissal. The commissioner found that George, along with other employees, was laid off on January 12, before George filed his complaint regarding the IOSHA violations. George did not seek judicial review of the commissioner’s decision under
On March 12, while the complaint was still under investigation, George filed a lawsuit in the district court containing the same retaliation claim as well as a claim for unpaid wages under
II. Scope of Review.
As the motion to dismiss in this case relied on matters outside the pleadings and both parties and the court treated it as a motion for summary judgment, we will do so as well. See Troester v. Sisters of Mercy Health Corp., 328 N.W.2d 308, 311 (Iowa 1982) (recognizing, in certain situations, where a motion to dismiss relies on matters outside the pleadings, “the proper procedure is to treat the motion as one for summary judgment“); see also Stotts v. Eveleth, 688 N.W.2d 803, 812 (Iowa 2004) (treating a motion to dismiss as a motion for summary judgment to conserve judicial resources).
A ruling on a motion for summary judgment is reviewed for correction of errors at law. City of Johnston v. Christenson, 718 N.W.2d 290, 296 (Iowa 2006). Summary judgment is appropriate where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.
A. Res Judicata.
Today we determine whether an administrative decision made after a brief investigation is a final adjudicatory action entitled to preclusive effect. The doctrine of res judicata prevents a party from relitigating a claim or issue that has already been determined by a final judgment. Ashe v. Swenson, 397 U.S. 436, 443, 90 S. Ct. 1189, 1194, 25 L. Ed. 2d 469, 475 (1970); see also Christenson, 718 N.W.2d at 297. Res judicata, or claim preclusion, applies only when a party has had a “full and fair opportunity” to litigate in the first trial. Spiker v. Spiker, 708 N.W.2d 347, 353 (Iowa 2006). A party asserting res judicata must establish the following:
- “the parties in the first and second action were the same“;
- “the claim in the second suit could have been fully and fairly adjudicated in the prior case“; and
- “there was a final judgment on the merits in the first action.”
Id. (quoting Arnevik v. Univ. of Minn. Bd. of Regents, 642 N.W.2d 315, 319 (Iowa 2002)). A party asserting issue preclusion, or collateral estoppel, must establish the following:
- the issue concluded must be identical;
- the issue must have been raised and litigated in the prior action;
- the issue must have been material and relevant to the disposition of the prior action; and
- the determination made of the issue in the prior action must have been necessary and essential to the resulting judgment.
Iowa Elec. Light & Power Co. v. Lagle, 430 N.W.2d 393, 397 (Iowa 1988) (citation omitted).
An agency determination will be entitled to preclusive effect in a judicial proceeding “[w]hen an administrative agency is acting in a judicial capacity and resolved disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate. . . .” United States v. Utah Constr. & Mining Co., 384 U.S. 394, 422, 86 S. Ct. 1545, 1560, 16 L. Ed. 2d 642, 661 (1966); see also Lagle, 430 N.W.2d at 397–98. “[A] valid and final adjudicative determination by an administrative tribunal has the same effects under the rules of res judicata, subject to the same exceptions and qualifications, as a judgment of a court.” Restatement (Second) of Judgments § 83 (1) (1982). In determining whether the agency is acting in a judicial capacity, we look to the factors set forth in the Restatement.
(2) An adjudicative determination by an administrative tribunal is conclusive under the rules of res judicata only insofar as the proceeding resulting in the determination entailed the essential elements of adjudication, including:
(a) Adequate notice to persons who are to be bound by the adjudication . . . ;
(b) The right on behalf of a party to present evidence and legal argument in support of the party’s contentions and fair opportunity to rebut evidence and argument by opposing parties;
(c) A formulation of issues of law and fact in terms of the application of rules with respect to specified parties concerning a specific transaction, situation, or status, or a specific series thereof;
(d) A rule of finality, specifying a point in the proceeding when presentations are terminated and a final decision is rendered; and
(e) Such other procedural elements as may be necessary to constitute the proceeding a sufficient means of conclusively determining the matter in question, having regard for the magnitude and complexity of the matter in question, the urgency with which the matter must be resolved, and the opportunity of the parties to obtain evidence and formulate legal contentions.
Restatement § 83; see Bennett v. MC # 619, Inc., 586 N.W.2d 512, 517 (Iowa 1998). Our cases are in accord with the rationale set forth in the comments to section 83 of the Restatement.
“Where an administrative agency is engaged in deciding specific legal claims or issues through a procedure substantially similar to those employed by courts, the agency is in substance engaged in adjudication. Decisional processes using procedures whose formality approximates those of courts may properly be accorded the conclusiveness that attaches to judicial judgments.”
Bennett, 586 N.W.2d at 517 (emphasis removed) (quoting Restatement § 83 cmt. b).
Another crucial factor the Restatement identifies in determining whether res judicata applies to an agency action is whether the individual is able to exert control over the proceeding.
In some types of administrative proceedings, the victim of a statutory wrong may complain to the agency but not be given initiative or control of an enforcement proceeding. In such circumstances the agency rather than the victim is the party to whom the rules of res judicata apply.
Restatement § 83 cmt. c. Although our case law has not yet applied this comment, we find the logic persuasive.
The Division, in investigating George’s complaint and subsequently dismissing it, was not acting in a judicial capacity. Neither the procedure nor the investigation meets the requirements to be granted preclusive effect in a judicial proceeding. First, the procedure described by statute itself does not bear much resemblance to an adjudication. To begin the process, George filed a complaint as described under
(1) An employee who believes that the employee has been discharged or otherwise discriminated against by a person in violation of this subsection may, within thirty days after the violation occurs, file a complaint with the commissioner alleging discrimination.
George filed a complaint in March, complete with a list of witnesses to contact and the tape recordings of the meetings with David Zinser.
Upon receipt of the complaint, the commissioner shall conduct an investigation as the commissioner deems appropriate. If, upon investigation, the commissioner determines that the provisions of this subsection have been violated, the commissioner shall bring an action in the appropriate district court against the person. . . .
Not only does the statutory description of the investigation lack the characteristics of an adjudication, but the Division was not acting in a judicial capacity during this specific investigation. Cf. Bennett, 586 N.W.2d at 519 (holding res judicata applied where “the commission was deciding issues through a procedure substantially similar to those employed by courts and was thus engaged in adjudication“). After George filed the complaint, the Division sent a letter, dated March 26, 2007, to D.W. Zinser notifying it of the complaint and asking it to submit a full and complete written account of the facts and a statement of its position in regard to George’s termination. The letter also asked D.W. Zinser to provide a copy of George’s personnel file, a list of all employees working with George, and a list of individuals who may have information pertaining to the case. Only nine days later, on April 4, the Division dismissed George’s complaint. George claims the Division neither contacted any of the witnesses he listed nor listened to the taped discussions between George and David Zinser. There is no evidence of any steps taken in this brief time that resemble an adjudication as
In our case, George did not have a full and fair opportunity to present evidence or respond to D.W. Zinser’s position. He had little to no control over the agency’s investigation. The Division did not hold a hearing on the issue. It only conducted an informal nine day investigation. The parties were not afforded a full and fair opportunity to litigate the matter in dispute. The only participation by George in the process was the filing of a complaint. As George, “the victim of a statutory wrong,” was not given “initiative or control of [the] enforcement proceeding,” it seems inherently unfair to apply the doctrine of res judicata to his claim. Restatement § 83 cmt. c.
Cases from other states reveal that an agency’s investigative findings are not granted preclusive effect. In Parson v. Department of Revenue, Alaska Housing Finance Corp., 189 P.3d 1032 (Alaska 2008), an employee, Parson, filed a complaint with the Alaska State Commission for Human Rights alleging his termination amounted to racial discrimination and retaliation for numerous complaints. Parson, 189 P.3d at 1034. After an informal investigation revealed the allegations were not supported by substantial evidence, the Commission dismissed Parson’s complaint. Id. Parson then filed a complaint in superior court. Id. at 1035. The Supreme Court of Alaska determined the doctrine of res judicata did not bar Parson’s claim, because “an informal investigation
Closure of Parson’s case after an informal staff investigation without any kind of adversarial activity or decision on the merits by an independent fact-finder is not a “dismissal with prejudice” and does not give rise to issue or claim preclusion in a subsequent lawsuit in superior court.
Id. at 1038. It did not matter to the court that the agency action was a final action subject to judicial review. Id. at 1037–38; see also Mac Home Improvement Co. v. Cuyahoga Metro. Hous. Auth., 7 Wage & Hour Cas. 2d (BNA) 1425 (Ohio Ct. App. 2000) (res judicata does not apply to an investigative report by the Department of Labor because the administrative investigation was not judicial in nature).
Here the Division, in its investigation of George’s complaint and subsequent dismissal, was not “deciding issues through a procedure substantially similar to those employed by courts,” and thus, it was not engaged in adjudication. Bennett, 586 N.W.2d at 519. At best, the Division decided it did not want to pursue the case. As the Division conducted an investigation, not a hearing, the Division’s dismissal of George’s complaint should not be given preclusive effect.
B. Unpaid Wages Claim.
In addition to the retaliatory discharge claim, George also alleges D.W. Zinser failed to pay him wages in violation of the Iowa Wage Payment Collection Law,
The district court declined to rule on whether the statutory remedies provided in
Our court has yet to determine whether an individual can bring a private cause of action for wrongful discharge in violation of the public policy behind IOSHA. The Court of Appeals for the Eighth Circuit has held “IOSHA presents a clear and well-recognized statement of public policy” and can be the basis for bringing a private action for wrongful discharge. Kohrt v. MidAmerican Energy Co., 364 F.3d 894, 899 (8th Cir. 2004). After a careful review of IOSHA,
An employee can bring an action for the tort of wrongful discharge when “a protected activity has been recognized through the implementation of an underlying public policy that would be undermined if an employee were discharged from employment for engaging in that activity.” Davis v. Horton, 661 N.W.2d 533, 535 (Iowa 2003). In order to succeed on such a claim, the employee must demonstrate the following four factors:
- The existence of a clearly defined public policy that protects an activity.
- This policy would be undermined by a discharge from employment.
- The challenged discharge was the result of participating in the protected activity.
There was a lack of other justification for the termination.
The first factor is satisfied by the public policy set forth in
The fact that the statute creates an administrative remedy does not indicate such a remedy is exclusive. The language in section 88.9(3) is permissive. “An employee who believes that the employee has been discharged . . . in violation of this subsection may . . . file a complaint with the commissioner alleging discrimination.”
Although state courts and circuit courts are split on the issue of whether OSHA and the state equivalents preclude common law claims for wrongful discharge, the majority recognize the statutory remedies are not exclusive. Compare Schweiss v. Chrysler Motors Corp., 922 F.2d 473, 475 (8th Cir. 1990) (holding OSHA’s “remedial scheme does not pre-empt [plaintiff’s] state law wrongful discharge action“); Flenker v. Willamette Indus., Inc., 967 P.2d 295 (Kan. 1998) (remedy provided by OSHA does
We hold that the remedy set forth in
IV. Conclusion.
The Division’s investigation of George’s complaint and subsequent dismissal was not an adjudication. Therefore, res judicata does not preclude George’s common law action for wrongful discharge in the
DECISION OF COURT OF APPEALS AFFIRMED IN PART AND VACATED IN PART; DISTRICT COURT JUDGMENT REVERSED.