Tina Lee v. State of Iowa, Polk County Clerk of Court

IN THE SUPREME COURT OF IOWA

No. 07–1879

Filed May 25, 2012

TINA LEE,

Appellee,

vs.

STATE OF IOWA, POLK COUNTY CLERK OF COURT,

Appellant.

On review from the Iowa Court of Appeals.

Appeal from the Iowa District Court for Polk County, James M.

Richardson, Judge.

Further review of a decision by the court of appeals rejecting a

claim of sovereign immunity and affirming a district court judgment on a

jury verdict based on a claim under the Federal Family and Medical

Leave Act by an employee against the State. DECISION OF COURT OF

APPEALS VACATED; JUDGMENT OF DISTRICT COURT REVERSED;

CASE REMANDED FOR FURTHER PROCEEDINGS.

Thomas J. Miller, Attorney General, Jeffrey S. Thompson, Deputy

Attorney General, and Grant K. Dugdale, Assistant Attorney General, for

appellant.

Paige E. Fiedler and Brooke C. Timmer of Fiedler & Timmer,

P.L.L.C., Urbandale, for appellee.

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CADY, Chief Justice.

In this employment case, we must primarily decide whether the

State of Iowa is immune from claims under the self-care provision of the

Family and Medical Leave Act (FMLA) in state court. The district court

denied the State’s posttrial motions for a judgment notwithstanding the

verdict or a new trial asserting Eleventh Amendment sovereign immunity

after a jury awarded damages to a state employee based on a claim for

violating the Act. The Iowa Court of Appeals affirmed. On further review,

we vacate the decision of the court of appeals, reverse the judgment of

the district court, and remand for further proceedings.

I. Background Facts and Prior Proceedings.

Tina Lee worked in the office of the Polk County Clerk of Court as a

state employee. She began working for the clerk’s office in 1981 as a

full-time employee in the traffic division. Lee received positive yearly

performance evaluations throughout much of her employment and was

promoted numerous times. At the time of her termination, she held the

position of lead worker in the records department.

The employee policy handbook distributed by the office of the state

court administrator contained a section governing the various forms of

leave available to employees, including a section on family and medical

leave under the FMLA. The policy read in part:

Employees who have worked at least 12 months and at least

1,250 hours during the previous 12 months may request up

to 12 weeks of job protected leave in a fiscal year, pursuant

to provisions of the federal Family and Medical Leave Act

(FMLA) of 1993.

(Emphasis added.)

The provisions also required employees approved for FMLA leave

“due to the employee’s own serious health condition (including childbirth

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and recovery) . . . to exhaust all paid sick leave, vacation, and comp time

before unpaid leave” would be granted. Throughout the section of the

handbook entitled “Family and Medical Leave Act (FMLA),” the leave was

described as “FMLA leave,” and the provisions repeatedly identified the

FMLA as the source of the leave. The FMLA leave provisions were in

place at all relevant times to this case.

In 1997, Lee was diagnosed with anxiety disorder.1 She

periodically took time away from work when her anxiety disorder would

lead to bouts of depression. In the fall of 2004, Lee requested FMLA

leave to cope with stress-induced anxiety brought about by family

turmoil. She submitted a completed FMLA request form on October 20,

2004, after visiting with her treating physician. The form included her

physician’s signature indicating Lee was experiencing a serious health

condition that was expected to last until November. Lee believed this

form enabled her to take time off work during the next month when she

felt it was necessary until she recovered. As a result, she left work

throughout the remainder of the month when she was unable to work

due to her medical condition. Lee previously used FMLA leave while

working at the clerk’s office to recover from neck surgery, care for her

daughter, and for surgery on both of her feet.

On November 3, 2004, Lee returned to work after having been gone

for several days. Following a meeting with her supervisor, Lee was

demoted for failing to follow absentee policies by calling in to work each

day she was absent. She was suspended for three days and asked to

surrender her key to the office. On November 8, Lee called her

supervisor because she was again unable to come to work. The following

1The parties have stipulated that Lee suffers from a serious health condition.

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day, Lee did not report to work and did not call. On November 10, Lee’s

supervisor sent her a letter terminating her employment for job

abandonment.

Lee filed a petition against the State of Iowa in the Polk County

District Court under 29 U.S.C. § 2612(a)(1)(D) (2000), the self-care

provision of the FMLA. In its answer, the State asserted the affirmative

defense of sovereign immunity under the Eleventh Amendment of the

United States Constitution and filed a motion for summary judgment on

the same grounds. In addition to claiming its constitutionally based

immunity was not abrogated by Congress in enacting the self-care

provision of the FMLA, the State asserted summary judgment was proper

because it did not otherwise expressly waive its immunity and did not

impliedly waive its immunity by placing the FMLA provisions in its

handbook. Relying on the United States Supreme Court decision in

Nevada Department of Human Resources v. Hibbs, 538 U.S. 721, 726,

123 S. Ct. 1972, 1976, 155 L. Ed. 2d 953, 962 (2003), and the overall

purpose of the FMLA, the district court found Congress abrogated the

State’s sovereign immunity in state court by enacting the self-care leave

provisions. Consequently, the district court did not address the issue of

express or implied waiver.

The case was tried and submitted to a jury on two legal theories.

Lee claimed wrongful termination and retaliatory discharge for exercising

her rights under the FMLA. The jury ultimately returned a verdict in

favor of Lee for $165,122.

The State filed a motion requesting the court either enter a

judgment notwithstanding the verdict or grant a new trial. Lee also filed

several posttrial motions, including a motion for reinstatement of her

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employment and other relief in the form of liquidated damages, front pay,

and attorney fees.

In the motion for judgment notwithstanding the verdict, the State

reiterated its position that Lee’s claims were barred by the State’s

constitutionally based sovereign immunity. It also argued that it neither

expressly nor constructively waived its immunity by placing the FMLA

provisions in its employee handbook and notices around the workplace.

Lee asserted the State constructively waived its immunity by failing to

inform its employees that it was retaining its immunity. Lee also argued

the State waived its immunity through its conduct in implementing the

FMLA provisions with knowledge that they were enforceable. Lee argued

that her FMLA rights would be lost without a right to sue for money

damages.

The district court denied the motion for judgment notwithstanding

the verdict. It again held Congress abrogated the State’s immunity.

Additionally, it found the State constructively waived its immunity by

placing the FMLA provisions in the handbook and posting notice of the

right to take FMLA leave. It stated:

The FMLA is explained in their personnel policies handbook

and posted in the Clerk of Court’s office. Employees are

aware that they have the right under the FMLA to take leave

for their own illnesses. Nowhere did Defendants indicate

that one specific type of leave, self-care leave, is not

permitted or that employees would have no recourse if they

were terminated or retaliated against for taking self-care

leave. Furthermore, the state employees testified they knew

it was illegal to terminate or retaliate against someone for

using FMLA leave. Thus, the State has waived any immunity

through its conduct.

The district court entered judgment against the State for the back-pay

damages as determined by the jury, in addition to reinstatement of

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employment and benefits, front pay, liquidated damages, attorney fees,

and educational training for supervisors.

The State appealed. In a separate proceeding, we granted the

State’s motion to stay the judgment pending this appeal. We transferred

the case to the court of appeals. The court of appeals determined that

Congress validly exercised its power in Section Five of the Fourteenth

Amendment to abrogate the State’s immunity to suit under the self-care

provision of the FMLA. It further found the State impliedly waived its

immunity to suit through the actions of the executive branch in allowing

State employees FMLA leave.

The State requested further review, which we granted. We

subsequently held the case in abeyance pending a decision by the

Supreme Court of the United States in Coleman v. Court of Appeals of

Maryland, ___ U.S. ___, 132 S. Ct. 1327, ___ L. Ed. 2d ___ (2012).

II. Standard of Review.

We review a district court’s decision to deny a motion for judgment

notwithstanding the verdict for errors at law. Van Sickle Constr. Co. v.

Wachovia Commercial Mortg., Inc., 783 N.W.2d 684, 687 (Iowa 2010). In

reviewing the court’s decision, we must determine whether sufficient

evidence existed to justify submitting the case to the jury at the

conclusion of the trial. Id. We view the evidence in the light most

favorable to the nonmoving party. Id.

III. Discussion.

The Family and Medical Leave Act was enacted by Congress in

1993. Family and Medical Leave Act of 1993, Pub. L. No. 103–3, 107

Stat. 6 (1993) (codified at 29 U.S.C. ch. 28). It entitles eligible employees

to take unpaid leave from their jobs for a number of qualifying reasons

for a period of up to twelve work weeks each year with guaranteed job

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protection. 29 U.S.C.A. § 2612(a)(1) (West, Westlaw through P.L. 112–

104 (excluding P.L. 112–96 and 112–102)).2 The first three reasons that

permit leave are typically collectively referred to as the “family-care

provisions.” They authorize a worker to take leave to care for family

members during the birth and care of a child, adoption of or foster care

of a child, or care of a spouse, child, or parent who has a “serious health

condition.” The fourth reason is referred to as the “self-care provision.”

It allows an employee to take leave due to the employee’s own “serious

health condition” that makes the employee unable to perform the

functions of his or her job.

The Act also creates a private right of action for employees to sue

employers in court for violating the law. Id. § 2617(a)(2). Both equitable

relief and money damages are available against employers who interfere

with the exercise of the rights of employees. Id. Moreover, Congress

expressly authorized employees to bring suit against any employer,

including a state or public agency, in state or federal court. Id.

2The qualifying reasons include:

(A) Because of the birth of a son or daughter of the employee and in

order to care for such son or daughter.

(B) Because of the placement of a son or daughter with the employee for

adoption or foster care.

(C) In order to care for the spouse, or a son, daughter, or parent, of the

employee, if such spouse, son, daughter, or parent has a serious health

condition.

(D) Because of a serious health condition that makes the employee

unable to perform the functions of the position of such employee.

(E) Because of any qualifying exigency (as the Secretary shall, by

regulation, determine) arising out of the fact that the spouse, or a son,

daughter, or parent of the employee is on covered active duty (or has

been notified of an impending call or order to covered active duty) in the

Armed Forces.

29 U.S.C.A. § 2612(a)(1).

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The portion of the Act that authorizes employees to bring suit

against a state gives rise to the issues presented in this case. The

Eleventh Amendment to the United States Constitution, in part, protects

nonconsenting states from private suit in their own courts over federal

law claims. This principle is a component of the broader doctrine of

sovereign immunity. Bd. of Trs. of the Univ. of Ala. v. Garrett, 531 U.S.

356, 363, 121 S. Ct. 955, 962, 148 L. Ed. 2d 866, 877 (2001). Yet, such

immunity can be waived by consent of the state or may be abrogated by

a valid act of Congress. Id. Both doctrines are raised in this case to

support the claim brought by Lee against the State.

The parties dispute whether the State’s waiver or consent to being

sued under the FMLA can be implied from the judicial branch policies

that allow FMLA leave and whether Congress properly abrogated the

State’s immunity. The State argues it is immune from private suit in

state court unless it expressly consents. Lee acknowledges the State’s

general immunity, but asserts it waived its immunity by its conduct in

this case.

The question of sovereign immunity involves the jurisdiction of the

court to resolve disputes between private citizens and their state. See

Caleb Nelson, Sovereign Immunity as a Doctrine of Personal Jurisdiction,

115 Harv. L. Rev. 1559, 1609 (2002) (recognizing the United States

Supreme Court’s sovereign immunity jurisprudence is composed of a

hybrid of personal and subject matter jurisdiction principles). If the

State is cloaked with immunity from suit in state court from claims

under the self-care provision, injured employees are precluded from

suing for monetary relief. See Coleman, ___ U.S. at ___, 132 S. Ct. at

1350, ___ L. Ed. 2d at ___ (Ginsburg, J., dissenting).

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A. Sovereign Immunity.

1. History and origin. At the outset, we note the current state of

the principle of sovereign immunity is complex and overall controversial.

See Jesse H. Choper & John C. Yoo, Who’s Afraid of the Eleventh

Amendment? The Limited Impact of the Court’s Sovereign Immunity

Rulings, 106 Colum. L. Rev. 213, 214 (2006) (noting “[t]he Court’s

Eleventh Amendment jurisprudence has come in for heavy scholarly

criticism”). The general notion of sovereign immunity originated from the

sixteenth-century English maxim that “the king can do no wrong.” Note,

Separation of Powers and the Discretionary Function Exception: Political

Question in Tort Litigation Against the Government, 56 Iowa L. Rev. 930,

933 (1971). In the absence of a monarchy, the principle of governmental

immunity was adopted by American courts using a different rationale,

“[T]hat there could be no legal right against the sovereign authority that

makes the law on which the right depends.” Id.

Early cases applying sovereign immunity in our country were

generally in tort. See State v. Sharp, 189 P. 631, 632 (Ariz. 1920)

(dismissing claim against state of Arizona for injuries sustained by state

employee doing construction), overruled by Stone v. Ariz. Highway

Comm’n, 381 P.2d 107, 109, 112 (Ariz. 1963); Mower v. Inhabitants of

Leicester, 9 Mass. 247, 250 (1812) (dismissing claim of private citizen

against city for injuries on city bridge). Iowa courts recognized and

applied the rule of immunity as early as 1855. Chance v. Temple, 1 Iowa

179, 201 (1855). The doctrine departed from its absolute terms in 1973,

when we determined sovereign immunity may be impliedly waived by the

State in certain cases. Kersten Co. v. Dep’t of Soc. Servs., 207 N.W.2d

117, 119 (Iowa 1973). We recognized immunity in our state courts was

“judicially created,” and as a result, the rule could be “judicially

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renounce[ed].” Id. at 118. We subsequently affirmed the principle that

“consent to suit or waiver of sovereign immunity need not always be

restricted to legislative enactment.” State v. Dvorak, 261 N.W.2d 486,

489 (Iowa 1978). In both instances, the rule of immunity was waived

because the State had voluntarily created legal relationships with private

citizens that subjected it to liability. Id. (concluding, since the State

voluntarily became a landowner, it must accept the obligations of any

other landowner); Kersten, 207 N.W.2d at 120 (“[T]he State, by entering

into a contract, agrees to be answerable for its breach and waives its

immunity from suit to that extent.”).

Iowa was not the only state to advance the notion of government

liability for common law claims in state courts. See Backus v. State, 203

P.3d 499, 502 (Ariz. 2009) (recognizing the legislature’s intent to enact a

presumption against general governmental immunity); see also Hargrove

v. Town of Cocoa Beach, 96 So. 2d 130, 133 (Fla. 1957) (holding

municipality could be liable for negligent acts of its police officers); Pierce

v. Yakima Valley Mem’l Hosp. Ass’n, 260 P. 2d 765, 774 (Wash. 1953).

Yet, until the United States Supreme Court’s decision in Alden v. Maine,

527 U.S. 706, 119 S. Ct. 2240, 144 L. Ed. 2d 636 (1999), the issue of

whether a state could be sued without its consent in its own courts for

the enforcement of federal rights was not broadly discussed. Roger C.

Hartley, Alden Trilogy: Praise and Protest, 23 Harv. J.L. & Pub. Pol’y 323,

337 (2000) [hereinafter Hartley]. In Alden, the Court recognized states

obtained their immunity from suit under federal statutes from the

structure of the Federal Constitution. Alden, 527 U.S. at 749–50, 119

S. Ct. at 2264, 144 L. Ed. 2d at 675. It reasoned the rule of immunity

was built into the Constitution to prevent “ ‘the indignity of subjecting a

State to the coercive process of judicial tribunals at the instance of

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private parties’ . . . regardless of the forum.” Id. at 749, 119 S. Ct. at

2264, 144 L. Ed. 2d at 675 (quoting In re Ayers, 123 U.S. 443, 505, 8

S. Ct. 164, 183, 31 L. Ed. 216, 229 (1887)). The Court’s interpretation

cited historical evidence to support its focus on the importance of “state

autonomy, fiscal predictability, and political accountability” and its

corresponding disapproval of “individuals’ ability to influence the course

of government through litigation.” Hartley, 23 Harv. J.L. & Pub. Pol’y at

350. On the same day, the Court rejected the principle of constructive

waiver of sovereign immunity in federal courts as unconstitutional. Coll.

Sav. Bank v. Fla. Prepaid Postsecondary Educ. Expense Bd., 527 U.S.

666, 682, 119 S. Ct. 2219, 2229, 144 L. Ed. 2d 605, 620 (1999). This

backdrop frames the substantive issues presented on appeal.

2. Preservation of error. Before addressing the substantive issues,

we first consider the argument by Lee that the State failed to preserve

error because it did not allege Tenth Amendment sovereign immunity in

district court. Instead, the State alleged only Eleventh Amendment

sovereign immunity, which it asserts applies equally in state court and

federal court. Even though the district court recognized the State’s

argument as an assertion of immunity, Lee argues it was not properly

raised, and as a result, it is not preserved for our review.

In addressing the source of states’ sovereign immunity to suit

under federal statutes in state court, the United States Supreme Court

has said:

We have . . . sometimes referred to the States’ immunity

from suit as “Eleventh Amendment immunity.” The phrase

is convenient shorthand but something of a misnomer, for

the sovereign immunity of the States neither derives from,

nor is limited by, the terms of the Eleventh Amendment.

Rather, as the Constitution’s structure, its history, and the

authoritative interpretations by this Court make clear, the

States’ immunity from suit is a fundamental aspect of the

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sovereignty which the States enjoyed before the ratification

of the Constitution, and which they retain today . . . except

as altered by the plan of the Convention or certain

constitutional Amendments.

Alden, 527 U.S. at 713, 119 S. Ct. at 2246–47, 144 L. Ed. 2d at 652. In

Alden, suit was commenced against the State of Maine in its own state

court under the Federal Fair Labor Standards Act. Id. at 711–12, 119

S. Ct. at 2246, 144 L. Ed. 2d at 651–52. The State of Maine declared it

was immune from suit under the Eleventh Amendment. Id. The United

States Supreme Court found the general principle of sovereign immunity

applied in state courts as reflected in the Eleventh Amendment. Id. at

733, 119 S. Ct. at 2256, 144 L. Ed. 2d at 665.

In this case, the argument by the State identifies the Eleventh

Amendment as the source of its defense. The substance of the State’s

argument is generally that it is immune from claims against it under the

self-care provision of the FMLA in state court. This argument is identical

to the argument made by the State of Maine in Alden, in which the

United States Supreme Court decided the Eleventh Amendment reflected

a broad constitutional principle of sovereignty that should apply both in

state and federal courts. Id.

We recognize the fundamental doctrine of appellate review that

issues must be raised in the district court before we may review them on

appeal. Meier v. Senecaut, 641 N.W.2d 532, 537 (Iowa 2002). Yet, the

underlying purpose of our error preservation rule provides guidance to

us in determining whether an issue has been raised and decided prior to

appeal. State v. Mann, 602 N.W.2d 785, 790 (Iowa 1999). In particular,

“ ‘the requirement of error preservation gives opposing counsel notice

and an opportunity to be heard on the issue and a chance to take proper

corrective measures or pursue alternatives in the event of an adverse

13

ruling.’ ” Id. (quoting State v. Tobin, 333 N.W.2d 842, 844 (Iowa 1983)).

We will not exalt form over substance when the objectives of our error

preservation rules have been met. Id. at 791.

We find the State preserved its sovereign immunity argument. The

State generally argued it is immune from suit in its own court for claims

under the FMLA. Lee disputed this argument by asserting implied

waiver of immunity and congressional abrogation. The district court

considered both arguments in its ruling and found the State was

generally immune, but that its immunity had been abrogated by

Congress under the self-care provision of the FMLA. Nothing in the

proceedings would have been altered had the State argued the source of

its immunity differently. Because we find the objectives of the error

preservation rules are met, we proceed with merits of the appeal. We

first consider whether or not Congress abrogated sovereign immunity of

states when it enacted the self-care provision of the FMLA.

B. Congressional Abrogation of Immunity. The district court

denied the State’s claim of immunity based on its finding that Congress

abrogated the sovereign immunity of states when it enacted the self-care

provision of the FMLA and entered judgment against the State based on

the jury verdict. The State argues the judgment must be reversed

because Congress did not act pursuant to a proper grant of power under

the Federal Constitution to abrogate the State’s immunity under the

FMLA self-care provision.

The Supreme Court of the United States recently held that suits

against states under the self-care provision of the FMLA are barred by

sovereign immunity because Congress failed to validly abrogate the

states’ immunity from suit. Coleman, ___ U.S. at ___, 132 S. Ct. at 1332–

33, ___ L. Ed. 2d at ___. The Court found there was insufficient evidence

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to show Congress enacted the self-care provision of the FMLA to enforce

the constitutional guarantees of equal protection by remedying or

preventing sex discrimination or sex stereotyping. Id. at ___, 132 S. Ct.

at 1335, ___ L. Ed. 2d at ___. Consequently, Congress has not abrogated

Iowa’s immunity from suit under the self-care provision of the FMLA, and

we turn to consider whether the State has waived that defense.

B. Consent or Waiver of Immunity. The State argues the district

court erred by finding it constructively waived immunity under the FMLA

self-care provision by informing its employees of the availability of FMLA

leave. Lee responds by further asserting the State expressly waived suit

under the self-care provision of the FMLA by enacting Iowa Code chapter

97B governing the Iowa Public Employees’ Retirement System. We

decline to address the issue of express waiver because it was not

presented to or ruled upon by the district court. See Meier, 641 N.W.2d

at 537 (“[I]ssues must ordinarily be both raised and decided by the

district court before we will decide them on appeal.”). As a result, we

proceed to address the constructive waiver arguments.

We first recognized constructive waiver of sovereign immunity in

Kersten, a case in which the State appealed from a district court decision

refusing to grant its special appearance asserting the defense of

sovereign immunity in a suit based on the alleged breach of contract

between the department of social services and a private corporation. 207

N.W.2d at 118. We departed from our prior precedent that declared only

the legislature, through an express statute, could give consent for the

State to be sued. Id. at 119. We recognized that contracts impose

corresponding obligations on parties, and we were unwilling to permit

the State to maintain it was immune from suit for breach of its

obligations. See id. at 119–20. Our court reasoned that allowing the

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State to avoid liability for breaching a contract would ascribe “bad faith

and shoddy dealing” to a sovereign. Id. at 120. Thus, we concluded the

State waives its immunity from breach-of-contract suits by entering into

a contract. Id. at 122. Additionally, following Kersten, we held sovereign

immunity could not prevent the State from being called into state court

to accept the legal obligations and duties attendant to voluntarily

becoming a landowner. Dvorak, 261 N.W.2d at 489. The two cases

reflected our belief that the State is answerable for the legal relationships

it voluntarily creates. See Swanger v. State, 445 N.W.2d 344, 349 (Iowa

1989) (recognizing Kersten and Dvorak were premised on the State

voluntarily undertaking legal relationships). If the legislature has

developed an exclusive and comprehensive system for private suit on

particular types of claims, we have made it clear that we strictly follow

the statutory guidelines waiving the State’s immunity. Id.

Ten years after we decided Swanger, the United States Supreme

Court decided College Savings Bank, which held that conduct by a state

was insufficient to waive its constitutional right to be sovereign. 527

U.S. at 682, 119 S. Ct. at 2229, 144 L. Ed. 2d at 620. In College Savings

Bank, an agency of the State of Florida was sued by a bank in federal

court under the Lanham Act. Id. at 671, 119 S. Ct. at 2223–24, 144

L. Ed. 2d at 613. The Act provided a private cause of action for conduct

by a state involving interstate marketing and administration of a

program. Id. at 670, 119 S. Ct. at 2223, 144 L. Ed. 2d at 613. The

Court found the effort by Congress to define the conduct by states that

would constitute waiver of immunity ineffective. Id. at 681, 119 S. Ct. at

2228, 144 L. Ed. 2d at 619. The Court emphasized that sovereign

immunity was grounded in the Constitution and that the “classic

description of an effective waiver of a constitutional right is the

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‘intentional relinquishment or abandonment of a known right or

privilege.’ ” Id. at 682, 119 S. Ct. at 2229, 144 L. Ed. 2d at 620 (quoting

Johnson v. Zerbst, 304 U.S. 458, 464, 58 S. Ct. 1019, 1023, 82 L. Ed.

1461, 1466 (1938)). Thus, the test for whether a state has waived its

sovereign immunity in federal court requires evidence of express consent

to suit, a “clear declaration” that the state intends to submit itself to

federal court jurisdiction. Id. at 676, 119 S. Ct. at 2226, 144 L. Ed. 2d at

616. Implied or constructive waiver is insufficient to waive the state’s

constitutional right. Id. at 680, 119 S. Ct. at 2228, 144 L. Ed. 2d at 619.

We applied the express waiver standard in Anthony v. State, 632

N.W.2d 897, 900 (Iowa 2001). In Anthony, state employees sued the

department of public safety for overtime pay requirements under the Fair

Labor Standards Act (FLSA). 632 N.W.2d at 899. In noting the strong

presumption of state sovereignty expressed by the Constitution, we

examined post-Alden decisions from other state courts that found

express waiver sufficient to waive immunity. Id. at 900. We applied the

broad understanding of constitutionally protected immunity reflected by

the Eleventh Amendment and confirmed by the Tenth Amendment to our

analysis and ultimately found the Iowa Wage Payment Collection Law

expressly waived the state’s immunity under the FLSA. Id. at 901–02.

We subsequently affirmed the application of these principles in Raper v.

State, 688 N.W.2d 29, 54 (Iowa 2004).

The State argues the development of our law since Kersten and

Dvorak reveals constructive waiver of sovereign immunity could not apply

under the FMLA because it was acting to implement a comprehensive

federal mandate. Instead, the State argues only express waiver could

apply under the FMLA, which Lee failed to raise.

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We reject the argument by the State that we no longer recognize

constructive waiver of immunity. We adopted the doctrine of

constructive waiver in Kersten based on the public policy that it would be

abhorrent to permit the State to enter into contracts with no

corresponding obligation to perform its promises under the contract. The

same public policy grounds that supported the adoption of the doctrine

at that time exist today, and our constructive-waiver doctrine similarly

remains viable today despite the federal approach to limit waiver of

sovereign immunity to express waiver. Thus, we turn to examine if the

district court was correct to find constructive waiver of immunity in this

case.

The district court in this case found the judicial branch

constructively waived the State’s immunity “through its conduct.” This

conduct was identified in three ways. First, the judicial branch used its

employee handbook to inform employees of their right to take self-care

leave under the FMLA. Second, the judicial branch failed to inform the

employees they could not sue the State for money damages if they were

terminated for taking self-care leave. Third, supervising employees of the

judicial branch knew it was illegal to terminate employees for taking self-

care leave.

As to the first type of conduct identified by the district court, our

law recognizes that provisions contained in state employee handbooks

can support constructive waiver of sovereign immunity. Employee

handbooks can create contracts between employers and employees.

Anderson v. Douglas & Lomason Co., 540 N.W.2d 277, 283 (Iowa 1995).

Although the State is generally immune from suits for money damages,

see Montandon v. Hargrave Constr. Co., 256 Iowa 1297, 1299, 130

N.W.2d 659, 660 (Iowa 1964) (recognizing the general common law rule

18

of immunity), the State may constructively waive its immunity by

entering into a contract. Kersten, 207 N.W.2d at 120. Thus, if a state

employee handbook creates a contract, the State constructively waives

its immunity from suit over that contract.

Yet, Lee did not bring a breach-of-contract claim, and she never

sought to establish that the handbook created a contract.3 Thus, this

case is distinguished from Kersten because the State in that case did not

dispute the existence of a contract, but only asserted it should be

immune from suit for breach of contract.

Nevertheless, we have not confined the constructive waiver of

immunity doctrine to contracts entered into by the State, but have

applied it in other circumstances where the State voluntarily assumes

legal consequences. See Dvorak, 261 N.W.2d at 489. Thus, in addition

to conduct by the State in entering into a contract, other conduct of the

State can give rise to constructive waiver of immunity. Therefore, we

must review the findings of the district court to determine if they support

3The summary judgment record and trial record show this case was tried and

submitted to the fact finder on Lee’s claims of interference with FMLA rights and

retaliatory discharge for taking FMLA leave. The verdict, accordingly, revealed no

finding the FMLA leave provisions of the handbook created a contract. Additionally, the

district court made no such separate finding. The district court made no such finding

because the issue was never presented. Instead, the focus of the underlying claims

litigated at trial was the FMLA constituted federal law that state employers were

required to follow. The issue of implied waiver of immunity was only raised by Lee as

an alternative legal argument in response to the State’s legal defense that it was

immune from suit because Congress never intended to abrogate states’ immunity in

enacting the FMLA.

Consequently, the district court addressed Lee’s implied-waiver argument and

accepted it by concluding the conduct of the State in putting the FMLA leave provisions

in the handbook constituted implied waiver of immunity. Thus, we can only review

whether this legal conclusion by the district court was legal error based on the issues

presented by the parties. We therefore do not consider the issue of whether the

handbook was an implied contract under Iowa law, a claim not presented to the district

court.

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the legal conclusion that the State constructively waived its immunity

based on the conduct identified by the district court.

We begin our review of the district court decision with two

important legal considerations. First, under 29 C.F.R. § 825.300–

.301(a)(1) (2003), employers covered by the FMLA were required to post

notice of employees’ rights under the Act in prominent places on the

premises and in employee handbooks. Second, under the FMLA,

Congress exercised its federal supremacy powers over the states to

provide self-care leave to state employees. Thus, the states were not only

required to provide self-care leave to their employees under the FMLA, 29

U.S.C. § 2612(a)(1)(D), they were also directed to inform employees about

the self-care provisions by placing notice of the provisions in employee

handbooks. 29 C.F.R. § 825.300–.301(a)(1). Yet, Lee presented no

evidence to suggest that the inclusion of the self-care leave provisions in

the handbook was for any purpose other than to comply with the federal

regulation implementing the FMLA. It was incumbent on Lee to produce

evidence to show the State did not place the provisions in its handbook

to comply with federal law. See Race v. Iowa Elec. Light & Power Co., 257

Iowa 701, 706, 134 N.W.2d 335, 338 (Iowa 1965) (“A party having the

affirmative of a proposition is always required to prove it.”).

The district court also supported its decision by finding the State,

in implementing the FMLA through the employee handbook, failed to

inform workers that its immunity would be retained. Lee, however, had

the burden to show that the exclusion of the language was designed to

waive sovereign immunity. Again, Lee failed to produce any such

evidence.

Likewise, knowledge by judicial branch employees that it would be

illegal to terminate an employee for using FMLA leave does not tend to

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make the conduct of implementing the federal mandate voluntary.

Knowledge of the federal supremacy doctrine does not make

implementation of a federal statute prima facie proof of a voluntary offer

to pay money damages for the statute’s violation.

We conclude the district court erred as a matter of law in

concluding the State constructively waived its immunity by placing FMLA

leave provisions in its employee handbook. The circumstances of this

case are vastly different from Kersten and Dvorak and cannot support

constructive waiver of immunity protected under the constitution.

IV. Conclusion.

The cloak of immunity granted to the State precludes state

employees from suing the state for monetary relief when denied self-care

leave under the FMLA. Coleman, ___ U.S. at ___, 132 S. Ct. at 1350, ___

L. Ed. 2d at ___ (Ginsburg, dissenting). Nevertheless, states are bound to

follow the self-care provisions of the FMLA, and state employees who are

wrongfully denied self-care leave are still permitted to seek injunctive

relief against the responsible state official. Id. (citing Ex parte Young, 209

U.S. 123, 155–56, 28 S. Ct. 441, 452, 52 L. Ed. 714, 727 (1908)

(establishing proposition that suit for injunctive relief against state

official does not offend sovereign immunity)). Additionally, the U.S.

Department of Labor may bring actions for damages or an injunction on

behalf of an employee against a state for violating the self-care

provisions. See 29 U.S.C.A. § 2617(b)(2)–(3), (d).

In this case, the judgment entered by the district court was

predicated on legal error. Accordingly, the noninjunctive relief granted in

the judgment cannot stand, and we must reverse the district court. We

remand the case to the district court to determine what relief granted in

its judgment is still available to Lee within the framework of this lawsuit,

21

findings of the jury at trial, and the cloak of immunity protecting the

State. The district court shall permit the parties to be heard on this

issue and enter a new final judgment for such relief. We do not retain

jurisdiction. Costs are assessed to Lee.

DECISION OF COURT OF APPEALS VACATED; JUDGMENT OF

DISTRICT COURT REVERSED; CASE REMANDED FOR FURTHER

PROCEEDINGS.

All justices concur except Mansfield, J., who takes no part.