Ousted Iowa Workers’ Comp Judge Loses Retaliation, Tort Appeal

A former workers’ compensation judge in Iowa, placed on paid leave and then fired when it was found she fraudulently had her 26-year-old daughter on her employer-provided insurance by misrepresenting the her marital status, lost her appeal at the Eighth Circuit on Monday.

Former administrative law judge Susan Ackerman had given testimony a few months earlier to the Iowa Senate Government Oversight Committee that was adverse to Teresa Wahlert, who was the director of Iowa Workforce Development, the agency where Ackerman worked.

She claimed the probe launched into her insurance coverage for her daughter—who was separated but still officially married—was pay back for the testimony and that Wahlert defamed her in her testimony to the committee.

But a performance evaluation Wahlert issued to Ackerman after they testified wasn’t an adverse employment action under the state whistleblower law, the U.S. Court of Appeals for the Eight Circuit said.

Ackerman didn’t allege that it affected her pay or that she would have gotten a higher raise if Wahlert had given her a better evaluation, Judge Roger L. Wollman said.

Even if her paid suspension was an adverse job action under the whistleblower law, Ackerman failed to show the employees involved in the insurance fraud probe knew about her senate testimony, the judge said.

“Ackerman has thus not presented evidence to show that the decision to suspend her with pay was anything other than a logical response to allow time for an investigation,” Wollman said.

She similarly failed to show whistleblower retaliation with regard to her termination because Wahlert and the two lead ALJs Ackerman also criticized during her testimony weren’t involved in the termination decision, the Eighth Circuit said.

Ackerman’s retaliation claims under federal and state constitutional law failed for similar reasons, it said.

Wahlert was immune from Ackerman’s defamation claim because Wahlert’s senate testimony occurred within the scope of her job, Wollman said.

And Wahlert only mentioned Ackerman as an example to illustrate a point, he said.

None of the misconduct Ackerman attributed to the state and other defendants was outrageous enough to support an intentional infliction of emotional distress claim, Wollman said, affirming a lower court.

Judges Steven M. Colloton and Jonathan A. Kobes joined the opinion.

Duncan Green PC represented Ackerman. The state attorney general’s office represented the defendants.

The case is Ackerman v. Iowa, 2021 BL 463412, 8th Cir., No. 20-2226, 12/6/21.