Is Sexual Harassment always Sexual Discrimination Under the ICRA? An Analysis of Caroline Toe v. Kraft Heinz Food Company

On March 10, 2025, Commissioner Cortese affirmed a Deputy Commissioner’s decision in Caroline Toe v. Kraft Heinz Food Company, sustaining a Motion for Summary Judgment in a case involving allegations of sexual harassment by two employees against the claimant.  Specifically, the claimant’s petition alleged, for the most part, she suffered mental injuries because “male employees exposed themselves to [her] while she was cleaning the male restroom,” a “male employee defecating near [her] while she was cleaning the male restroom,” fellow “employees treatment of [her] following the incidents of exposure,” and other employees telling her she was going to be fired because she reported the incident.  Other than an allegation that the employer accused her of lying about the exposure incidents, it does not appear from the opinion there were allegations that her employer discriminated against her based on these incidents. 

The Commissioner dismissed the workers’ compensation case, ultimately holding that the worker’s compensation claim was pre-empted by the Iowa Civil Rights Act.  First, he found there were no genuine issues of material fact, because

…claimant alleged to the ICRC (Iowa Civil Rights Commission), in her original notice and petition, in her amended petition, and in her second supplemental answers to interrogatories to defendants, that claimant’s allegations relate to two incidents of alleged sexual harassment which occurred on November 16, 2022 and on November 29, 2022. 

Further, he noted that although the ICRC administratively closed their complaint, she was provided with notice of her right to sue, and, although the claimant had withdrawn her complaint before the ICRC, that withdraw did “not appear to impact her ability to request a right to sue letter.” 

The Commissioner then turned to the second prong of summary judgement: whether the moving party is entitled to judgment as a matter of law.  Here, he noted that each party relied on one of two Supreme Court cases addressing this issue, Ottumwa Housing Authority v. State Farm Fire and Cas. Co, 495 N.W.2d 723 (Iowa 1993) (relied on by the defendant and hereinafter referred to as OHA), and Baird v. Ottumwa Community School District, 551 N.W.2d 874 (Iowa 1996) (relied on by the claimant). 

OHA was an insurance coverage case.  Two employees of the Ottumwa Housing Authority filed claims with the Iowa Civil Rights Commission alleging they were sexually harassed by the executive director of the Association.  OHA forwarded the complaints to its insurer, State Farm Fire and Casualty, who denied coverage of the claims under either its general liability, workers’ compensation, or employers’ liability policies.  As it pertained to the workers’ compensation policy, the Court concluded there was no coverage because there was no claim:

Contrary to OHA’s contention, we think neither [employee] had a basis for a workers compensation claim.  Under our workers compensation law, an employer’s immunity is the quid pro quo by which the employer gives up his normal defenses and assumes automatic liability, while the employee gives up his right to common law verdicts.

Because the employees had a “right of action against OHA, their employer, for sex discrimination under both state and federal law” (emphasis added), the quid pro quo for the employer giving up its normal defenses was gone.  “Therefore, the basis for a workers’ compensation claim grounded on these same discrimination claims is likewise gone.” 

The defendants in Toe relied on OHA, arguing that the claimant’s allegations of sexual harassment were covered and, therefore, pre-empted by the Iowa Civil Rights Act (ICRA).  The claimant, on the other hand, argued that Baird, a subsequent Supreme Court decision, was more relevant.

The facts that led to the litigation in Baird were similar to the situation in OHA.  The claimant filed a workers’ compensation claim against her employer, alleging psychological injuries as a result of abusive treatment by her supervisors stemming from alleged sexual harassment.  The claimant filed a simultaneous claim with the ICRC, but settled that claim with her employer.  After that case was settled, the defendants in the workers’ compensation claim filed a motion for summary judgment based on the Supreme Court’s prior holding in OHA.  The Baird Court noted its decision in OHA, and admitted that the “quid pro quo is gone when a sex discrimination claim under state or federal statutes is available for the same acts alleged in the workers’ compensation proceeding.”  (emphasis added).  But the Baird Court found nothing in the record to show that the acts alleged by the employee in the civil rights claim occurred, or, if they did, whether those acts “constituted sex discrimination in employment.”  (emphasis added).

Baird was not reversed; it was remanded to the Commissioner to determine if the claimant had a right to proceed with her claim.  Notably, the Court gave the following instruction:  “It is manifest that not all circumstances that would create a compensable claim for emotional distress benefits . . would give rise to a sexual discrimination claim. . .”   To be sure, a sexual discrimination claim under the ICRA requires more than just sexual harassment by a co-employee; the elements of a sexual discrimination claim based on sexual harassment requires, (in addition to being a member of a protected class and subjected to sexual harassment), that the harassment affect a term, condition or privilege of employment, and that the employer “knew or should have known of the harassment and failed to take prompt and appropriate remedial action.” Lynch v. City of Des Moines, 454 NW 2d 827 (Iowa 1990).

Implicit in the Baird Court’s instruction and its’ decision to remand to the commissioner is that the Commissioner is required to make that determination and decide if the case is pre-empted by the ICRA.  It does not appear from the opinion the Commissioner took that step.  Rather, he simply decided that pre-emption applied since the allegations in both the workers’ compensation claim and the civil rights claim were the same.  And, because those allegations were claims of sexual harassment, he appeared to believe that put them under the sole jurisdiction of the ICRC.  Baird would appear to indicate this is not the end of the inquiry.

Unfortunately, the Supreme Court in both OHA and Baird use the terms “sexual harassment” and “sexual discrimination” almost interchangeably, perhaps because the sexual harassment in both cases were by supervisors or executives, thereby implicating the employer in a civil rights case.  The Commissioner appears to have grasped onto this language in his opinion:  “In their answer, defendants alleged the agency lacked subject matter jurisdiction due to allegations stemming from incidents of alleged sexual harassment;”   “[C]laimant confirmed the alleged incidents of sexual harassment identified in her original notice and complaint in the workers’ compensation … case … were the same incidents at issue in her ICRC complaint.” “Defendants argued claimant’s allegations stem from two incidents of alleged sexual harassment on November 16, 2022. . .;” “There is no dispute claimant alleges she sustained injuries as a result of several incidents of sexual harassment.”  “Claimant alleges mental injuries caused by these incidents of sexual harassment.” (emphasis added).

As it pertained to his review of the Supreme Court decisions, the Commissioner again focused on sexual harassment, and not sexual discrimination:  “In [OHA], two women, who were employed by the Ottumwa Housing Authority, alleged they were sexually harassed;”  “[T]he women filed petitions in state and federal court alleging they were sexually harassed.”  “The court disagreed with the defendants’ contention that Ms. Baird specifically claimed that her emotion stress that formed the basis for her workers’ compensation claim was the result of sexual harassment.” (emphasis added).

The Commissioner acknowledged that both OHA and Baird dealt with discrimination claims, not merely sexual harassment:  (“thus the basis for a workers’ compensation claim grounded on the same discrimination claim was also gone”)(citing OHA) and (“the court found that the ICRC or a court never adjudicated whether the acts upon which the civil rights complaint was based occurred, or whether they constituted sex discrimination in employment”)(citing Baird).  But it does not appear from the opinion the Commissioner made the determination Baird requires in his analysis of Toe.

Absent pre-emption, a claim for injuries stemming from sexual harassment by a co-employee would almost certainly be compensable.  Since 1979, the Supreme Court has held that injuries to an employee who is “merely the passive object of an assault” arises out of the employment.  Cedar Rapids Community Sch. v. Cady, 278 NW 2d 298 (Iowa 1979).  This is so even though the injuries are purely psychological or emotional in nature.  See Dunlavey v. Econ Fire & Cas. Co. 526 N.W.2d 845 (Iowa 1995) and Tripp v. Scott Emergency Communication Center 977 N.W.2d 459 (Iowa 2022).  And, it would appear, the fact that there may be overlapping claims does not necessarily preclude a claimant proceeding on both fronts: “His claim for statutory benefits (under the IWCA) arises from his back injury; his claim for civil damages (under the ADA) arises from the employee’s allegedly discriminatory conduct.”   Cargill, Inc. v. Conley, 620 N.W.2d 496 (Iowa 2000) (distinguishing that case from OHA.

Under Cargill, the Commissioner does have jurisdiction over the subject matter of the workers’ compensation claim.  Id.  It is not unusual for practitioners to proceed under both a workers’ compensation theory and a discrimination theory while waiting for the facts to fully develop through the discovery process.  In fact, statutes of limitations and other notice requirements may require filing in both venues.  The Commissioner’s reluctance to make a determination on the existence of discrimination is understandable.  However, where it’s alleged or plead that the claim of injury in the workers’ compensation case does not include the elements of a discrimination claim under Section 216, the Commissioner should either decide that issue or stay the proceedings until such time as the ICRC rules on the issue or the time to sue has passed. Otherwise, the injured worker may be left without a remedy.

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