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Cote v. Derby Insurance Agency, Inc. and Kevin Dorn

Iowa Supreme Court

Case Name: Cote v. Derby Insurance Agency, Inc. and Kevin Dorn

Filed: March 8, 2018 by Iowa Supreme Court (No. 16-0558)

Subject matter: Applicability of the employee-numerosity requirement in the Iowa Civil Rights Act (ICRA) to corporations.

“The ICRA does not apply to “[a]ny employer who regularly employs less than four individuals. . . . [I]ndividuals who are members of the employer’s family shall not be counted as employees.” Iowa Code § 216.6(6)(a) (2011). The plaintiff worked at a small insurance agency and alleges she was sexually harassed by her supervisor, the sole owner’s husband. The defendant insurance agency, a subchapter S corporation, employed the owner and [three family members,] the plaintiff, and another nonfamily member. The employer moved for summary judgment on the ICRA claims on grounds that it employed fewer than four individuals (not counting the family members). The district court denied summary judgment on that ground, ruling that a corporate employer is ineligible for the family-member exception. We granted the employer’s application for interlocutory appeal and transferred the case to the court of appeals, which affirmed that ruling. We granted the employer’s application for further review.

We hold that a corporation does not have family members and therefore cannot qualify for the family-member exception in section 216.6(6)(a).

Accordingly, for the reasons explained more fully below, we affirm the decision of the court of appeals.”

This case includes discussion of the following:

  • The statutory analysis of the words in Iowa Code § 216.6(6)(a). The Court states:

The ICRA defines “employer” as “the state of Iowa or any political subdivision, board, commission, department, institution, or school district thereof, and every other person employing employees within the state.” Iowa Code § 216.2(7) (emphasis added). “Person” is defined as “one or more individuals, partnerships, associations, corporations, legal representatives, trustees, receivers, and the state of Iowa and all political subdivisions and agencies thereof.” Id. § 216.2(12). These statutory definitions, however, are qualified by the phrase “unless the context otherwise requires.” Id. § 216.2. Accordingly, while it is clear that a corporation can be an “employer,” it does not follow that section 216.6(6)(a)’s reference to “the employer’s family” includes corporate employers. The fighting issue is whether corporations can have “family members” within the meaning of that provision.

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