IA Civil Rights Commission Can Bring Case Even Though Worker Agreed to Arbitrate

Iowa case law summary by Attorney Richard Clem: Civil Rights Commission not bound by arbitration agreement.

Rent-A-Center, Inc., v. Iowa Civil Rights Commission. IA Civil Rights Commission not bound by arbitration agreement

Nicole Henry began working for Rent-A-Center, Inc., in Council Bluffs in 2007. She signed an agreement that she would arbitrate all claims relating to her employment, and that she would not file any lawsuits. She became pregnant, and gave her employer a note from her doctor that she had a twenty-pound lifting restriction. Her district manager allegedly told her that the company didn't usually accommodate restrictions based on temporary health conditions, and she should apply for unemployment. The next day, the company sent her home and offered her a choice between unpaid leave and termination. She chose unpaid leave, and then filed a complaint with the Iowa Civil Rights Commission (ICRC). The ICRC cross-filed the complaint with the EEOC.

Rent-A-Center moved to dismiss the ICRC complaint because of the arbitration provision. An administrative law judge held that the ICRC was not a party to the arbitration agreement and was not bound by it. The ICRC affirmed this ruling, and Rent-A-Center petitioned for judicial review with the district court of Polk County, Judge Robert B. Hanson. Judge Hanson agreed with Rent-A-Center and held that the case should be arbitrated. The ICRC appealed, and the Iowa Supreme Court took the case.

The ICRC argued that it was not bound by the arbitration agreement because it was not a party to that agreement. Furthermore, it took the position that its case was not an action on behalf of the employee, but instead an independent public enforcement action. The Supreme Court agreed. Even though one remedy available to the ICRC is damages to the employee, the Court noted that the agency's main mission was to pursue cases in the public interest.

The Court also examined the Federal Arbitration Act, and held that nothing in that law preempted Iowa law in this case. For these reasons, the Supreme Court reversed the district court and affirmed the ICRC's order.

No. No. 13-0412 (Iowa Feb. 28, 2014).

Please see the original opinion for the court's exact language.


Richard P. Clem is an attorney and continuing legal education (CLE) provider in Minnesota. He has been in private practice in the Twin Cities for 25 years. He has a J.D., cum laude, from Hamline University School of Law in St. Paul and a B.A. in History from the University of Minnesota. His reported cases include: Asociacion Nacional de Pescadores a Pequena Escala o Artesanales de Colombia v. Dow Quimica de Colombia, 988 F.2d 559, rehearing denied, 5 F.3d 530 (5th Cir. 1993), cert. denied, 510 U.S. 1041 (1994); LaMott v. Apple Valley Health Care Center, 465 N.W.2d 585 (Minn. Ct. App. 1991); Abo el Ela v. State, 468 N.W.2d 580 (Minn. Ct. App. 1991).

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