Terminating an ‘Irresistible’ Employee,” American Bar Association, Employment & Labor Relations Law

In Nelson v. James H. Knight, DDS, P.C., et al., the Iowa Supreme Court found that an employer did not engage in unlawful gender discrimination when the employee was terminated due to the employer’s wife’s concerns about the nature of the relationship between the employer and the employee.

This matter arose in Dr. Knight’s dental practice, where the plaintiff, Melissa Nelson, worked as a dental assistant for over 10 years. During the last six months of Nelson’s employment, Dr. Knight and Nelson began texting each other regarding work and personal matters. Neither Nelson nor Dr. Knight found any of the texts offensive or objectionable, even though some contained moderate sexual comments. For instance, Dr. Knight once told Nelson “if she saw his pants bulging, she would know her clothing was too revealing.”

Shortly thereafter, Dr. Knight’s wife, who was also an employee of the dental practice, discovered the text messages and demanded that Dr. Knight terminate Nelson’s employment. Dr. Knight’s wife had several additional reasons, aside from the texting, to request Nelson’s termination. According to the wife, Nelson dressed inappropriately, flirted with Dr. Knight, and attempted to spend time alone with Dr. Knight after work hours. Nelson disputed all of the wife’s allegations.

Dr. Knight and his wife consulted with their pastor concerning his wife’s concerns. The pastor recommended Nelson’s termination, and the Knights agreed. As such, Dr. Knight, accompanied by another pastor from the same church, terminated Nelson and provided her with one month’s severance. At the time of the termination, Dr. Knight informed Nelson that their relationship had become a detriment to his family.

Following Nelson’s termination, Dr. Knight met with Nelson’s husband. Dr. Knight informed him that Nelson was the best assistant he ever had and nothing inappropriate occurred between the two of them. He also stated that he feared he might try to have an affair with Nelson down the road.

Nelson then filed a one-count complaint alleging that Dr. Knight had improperly discriminated against her on the basis of her sex in violation of the Iowa Civil Rights Act. Nelson did not allege that she was sexually harassed. Rather, she argued Dr. Knight terminated her because of her gender and that if she was a male she would not have been terminated.

The district court granted summary judgment finding that Nelson was not terminated because of her gender, but because she was a threat to Dr. Knight’s marriage. Nelson appealed.

Similar to Title VII of the U.S. Civil Rights Act, section 2.16.6(1)(a) of the Iowa Code makes it generally unlawful to discharge or otherwise discriminate against an employee because of the employee’s sex. The Iowa Code also states that, when interpreting discrimination claims, courts should turn to federal law, including Title VII. As a result, the Iowa Supreme Court relied almost exclusively on decisions from various circuit courts interpreting Title VII.

Nelson’s primary argument was that “but for” her gender she would not have been terminated. Dr. Knight countered that Nelson was not terminated because of her gender, but because of their relationship. In supporting his argument, he noted he only employs women and that Nelson’s replacement was a woman. The court, in analyzing this argument, spent a great deal of time considering the Eighth Circuit’s decision, Tenge v. Phillips Modern Ag Co. In Tenge, the Eighth Circuit granted summary judgment in favor of the employer finding that the employer had not engaged in sex discrimination under Title VII. However, in Tenge, the plaintiff had engaged in flirtatious conduct where Nelson “did not do anything to get herself fired except act as a female.”

In response to Dr. Knight’s reliance on Tenge and other Title VII cases, Nelson argued that (1) any termination because of a boss’s sexual interest amounted to sex discrimination; (2) without some type of employee-misconduct requirement, employers would be able to justify adverse employment actions by essentially arguing that their wife made them do it; and (3) Dr. Knight should not be able to avoid liability for terminating Nelson out of fear of future sexual harassment.

The court noted that Title VII and the Iowa Civil Rights Act are not general fairness laws. Moreover, the court distinguished between isolated employment decisions based on relationships and a decision that is based on gender itself. As the court acknowledged, employers are permitted to make employment decisions based on their personal beliefs and biases, as long as those beliefs and biases are not based in a protected category under the law.

While the court acknowledged that employment decisions made based on gender stereotypes are impermissible under Title VII, the specific record before the court did not support a finding that Dr. Knight’s action predicated such a stereotype. Rather, the court found that Nelson was terminated due to the personal, consensual relationship she had with Dr. Knight, and Dr. Knight’s wife’s insecurity about that relationship. The court specifically noted that if Nelson established that the termination resulted from her failure to conform to a particular gender-based stereotype or that there was a pattern of terminating female employees, the court’s decision would likely have been different.

Lastly, the court dismissed Nelson’s sexual-harassment argument on the basis that sexual harassment is illegal due to the hostile environment or abusive atmosphere that is created from said harassment. The court found that an isolated decision to terminate an employee before such an atmosphere arose, even if the reasons were unjust and unfair, did not create an atmosphere that resulted in a violation of anti-discrimination statutes.

In affirming the district court’s decision, the court found the specific facts of this matter did not amount to sex discrimination under Iowa’s Civil Rights Act. Although this case was brought under Iowa state law, the court’s heavy reliance on Title VII cases indicates that the result would have been the same should the matter have been brought as a Title VII complaint.

Under Nelson, a boss’s termination of an employee based on his attraction to that employee is not enough to support a claim of sex discrimination. As a practical matter, attorneys and clients must be mindful that a “wife made me do it” defense will likely not suffice should there be any other facts in support of sex discrimination.

By Christopher Carcich and Carly Skarbnik Meredith – June 10, 2013