Industry the November 2014 issue

Defiance and Retaliation

Iowa’s former workers comp commissioner squares off against governor alleging sexual discrimination.
Posted on November 27, 2014

A month before taking office, Branstad, a Republican who had also been governor from 1983 to 1999, requested the resignations of Godfrey and 29 other department heads appointed by his predecessor, Democrat Chet Culver. At the time, a Branstad spokesman called the policy consistent with requests made by other incoming governors.

“This is a management exercise that asks for the resignations, and the governor will then review each position,” the spokesman told the Des Moines Register.

Godfrey saw it otherwise. He was the only appointee to publicly defy the request.

Appointed in 2006 to head the board overseeing work-related injury disputes and reappointed by Culver in 2009, the commissioner informed Branstad once in December 2010 and again a few months later that he had no intention of leaving his post until his appointment expired in 2015. There the matter might have ended, with Godfrey serving as a commissioner at the displeasure, so to speak, of the governor.

Branstad, however, chose not to grin and bear it.

Unable to rid his administration of a workers compensation commissioner with a fixed term specifically established to insulate the position from political influence, Branstad instead asserted the power of his office by slashing Godfrey’s annual salary by a little more than a third, to $73,000 from $112,000. The reduction in pay set in motion a legal tussle that has seen an employment dispute veer into a discrimination case, which in turn has raised ancillary questions about whether Branstad and members of his administration were acting in an official capacity in their attempt to pressure Godfrey from his job.

Godfrey, 41, contends in a 2012 lawsuit filed in Iowa District Court that the governor sought his resignation and subsequently reduced his salary not as a “management exercise” but because Godfrey is gay. He is seeking $1 million in compensative and punitive damages.

“It’s a discrimination claim, but it is also an extortion claim,” Godfrey explains. “I don’t think a straight, married man with children would be put in the position I’ve been put in with my salary.”

The editorial board of the Des Moines Register, the state’s largest newspaper, seconds that contention.

“These bullying tactics are unbecoming of the governor of Iowa and key members of his administration,” the Register editorialized in June. “The treatment of Godfrey has been petty and mean. … It is unfortunate that he has had to mount this defense at the cost of his pay, his reputation and his own personal resources while the state, with inexhaustible resources from the taxpayers, is apparently determined to bankrupt Godfrey in the process.”

I don’t think a straight, married man with children would be put in the position I’ve been put in with my salary.
Christopher Godfrey, former Iowa workers compensation commissioner

The Branstad administration, in published and broadcast reports, has vehemently denied the suggestion that Godfrey was singled out because of his sexual orientation.

In response to a caller to the “Ask the Governor” show on WHO radio in Des Moines, Branstad maintained the move to replace Godfrey was strictly a business decision. According to a transcript of the broadcast published by Bleeding Heartland, a statewide Iowa political blog, Branstad said the Iowa Association of Business and Industry “encouraged me” to replace Godfrey.

“So the business groups in Iowa are the ones that told me in no uncertain terms that they were not happy with the direction under Mr. Godfrey,” Branstad said. “And I feel that what we’ve done is appropriate. And I would like to have a new direction in that agency.”

Jimmy Centers, the communications director for the governor, declined to comment for this story, citing “ongoing litigation.”

In becoming headline news, the Godfrey case created the unintended effect of thrusting an obscure state agency into the limelight. Iowans suffer about 22,000 work-related injuries a year, according to Godfrey. Among those injured, 4,500 file petitions seeking compensation, and each year 600 to 800 cases result in trials. The Workers Compensation Commission annually hears 250 to 300 appeals of court decisions.

Godfrey brought well over a decade of experience in employment law to the post when Culvert nominated him to head the 30-employee agency in January 2006. Though critics point to his representation of injured workers in claims brought against employers, his résumé also includes experience as a corporate counsel for a meatpacking concern as well as acting as a legal representative on behalf of self-insured Iowa corporations. 

Godfrey’s nomination for commissioner flew through the Iowa State Senate in 2006 and again after Culvert resubmitted his name for reappointment for a six-year term starting in 2009.

Moreover, in a state that much of the nation—correctly or not—identifies with right-leaning voters who dominate cable news channels in the quadrennial run-up to the Republican Iowa caucuses, Godfrey’s sexual preference was a nonissue.

“It has never been an issue,” he says. “I’m open. My partner goes to Workers Compensation functions with me. It’s not shocking to anybody.”

His orientation may be of little concern with most of the people Godfrey encounters on the streets of Des Moines and the towns and farms across the state. But the pay reduction convinced Godfrey that it clearly poses a problem for the Branstad administration.

These bullying tactics are unbecoming of the governor of Iowa and key members of his administration.
Editorial in the Des Moines Register

“To make this such a high-profile fight, especially considering I’ve been overwhelmingly confirmed twice, is unseemly,” he says. “It’s inexplicable why the governor would do this.”

Cedar Rapids attorney Chris Scheldrup, the lead partner in a firm that derives 80% of its billing from Iowa firms seeking representation in workers comp cases, believes professional disenchantment, and not Godfrey’s sexual orientation, motivated Branstad to pressure the commissioner from office.

“I personally see this as an issue of the governor wanting to move the agency forward and not an act of retribution against the commissioner,” Scheldrup says. “The issue is the cost of workers compensation to the system and how it will affect employment growth in Iowa. And that is what precipitated the decision to go with a different commissioner. I don’t believe the governor is the type to discriminate.”

Michael Gartner, a native Iowan, Pulitzer Prize-winning journalist, former president of NBC News and now president of the Iowa Cubs, the Triple A farm club of the Chicago Cubs, supports Godfrey but aligns himself with Scheldrup on the bias question. 

“The Branstad administration doesn’t like Godfrey for some reason—though surely not because he’s the only openly gay department head in his administration,” Gartner wrote in a column he writes for Cityview, an alternative Des Moines weekly.

Scheldrup acknowledges Godfrey is both well liked and highly regarded for his work ethic and diligence among peers in the close-knit workers comp community. But he tempers his praise by noting the commissioner has nonetheless gained a reputation for being “prone to decisions that favor complainants.”

The consequence for Iowa business, Scheldrup adds, has been an exponential increase in workers comp premiums during Godfrey’s tenure.

“There’s no question that our clients view Commissioner Godfrey and his administration as polarizing,” Scheldrup says. “He has made decisions that are inconsistent with the view of employers and insurance companies.”
Branstad and Scheldrup are on the same page.

“He’s been an advocate for one side before he came into this position,” the governor told WHO, according to another Bleeding Heart transcript. “And since he got into that position, the cost of workers comp for Iowa businesses has gone up dramatically. I think we can find somebody that’s more fair.”

But according to the National Council on Compensation Insurance, Iowa rates are “relatively stable,” meaning they don’t vary more than 5% up or down. And claim frequency dropped by 3.9% in 2012, but it is still high compared to surrounding states. Indemnity costs, however, are higher than most states in the region while medical costs trend about the same, the NCCI says.

Godfrey supporters note that balancing the scales when the interests of injured workers conflict with those of employers is the reason nearly every state established some form of a compensation commission in the first place. And Nathaniel Boulton, a Des Moines employment attorney who has won and lost cases before the compensation commission during Godfrey’s tenure, singles out Godfrey for being unfailingly fair and objective. Boulton says he never understood the popular assumption that Godfrey favored workers over employers. “I didn’t see anything that said this guy is out there increasing benefits for workers and consistently finding against employers,” he says.

Boulton dismisses the suggestion that Godfrey was tainted by his pre-commission work on behalf of plaintiffs seeking compensation. The same argument, he argues, could be applied to a commissioner installed in the position from the corporate side of the equation.

“I don’t get the mentality that says if someone represented the insurance companies or if they represented the workers then they can’t hold the job because of bias,” Boulton says. “It seems like a double standard.”

Godfrey’s supporters point to the state-by-state report card of workers comp outcomes compiled by the Work Loss Data Institute as evidence of the commission’s impartiality under his watch. WLDI analyzes injuries, payouts and other factors in its periodic review of state-level workers compensation performances. The California-based organization awarded Iowa a “B” on its last WLDI report card (2012), placing the Hawkeye State among the top seven states in the nation in its performance on compensation measures.

There’s no question that our clients view Commissioner Godfrey and his administration as polarizing. He has made decisions that are inconsistent with the view of employers and insurance companies.
Chris Scheldrup, attorney, Cedar Rapids, Iowa

“The thing is, there was no good reason to hound Godfrey out of his job,” Cedar Rapids Gazette columnist Todd Dorman wrote in August. “There’s no evidence he did a bad job. To the contrary, there’s plenty of evidence that Iowa’s workers compensation system has been well-regarded nationally under his watch.”

Boulton says Godfrey deserves accolades for streamlining the agency by hearing appeals and delivering decisions in a timely manner as well as implementing significant upgrades to the commission’s online, interactive website, which rates Godfrey’s performance in office as “exemplary.” 

“He really pushed for a lot of things to make the agency serve the business community and workers in a more efficient way,” Boulton says. 

Donna Red Wing, the executive director of One Iowa—the state’s premier LGBT advocacy organization—says the support Godfrey has received from attorneys with business before the commission as well as leading state lawmakers indicates that Branstad may have indeed singled out Godfrey because of sexual orientation. To Red Wing, the Godfrey case stands apart simply because it involves a top-level government official.

“We’re not going to read about the person in the grocery store or the parks department getting fired,” Red Wing says. “But this is high profile. This is someone asked to step down who chose to make a lot of noise about it.”

Red Wing cautions that Iowa’s reputation for equity—it was the first Midwest state to sanction same-sex marriage—masks the intolerance that can transcend state and local equal rights ordinances.

“Homophobia can make things very difficult,” Red Wing says. “It’s terrific that we have LGBT protection laws. But laws don’t change the culture and laws don’t make everyone accepting overnight.”

Though the civil rights angle has received a fair share of attention, the bulk of the outcry over Godfrey’s challenge to establishment Iowa Republicans has focused on the legal fees incurred in Christopher J. Godfrey vs. State of Iowa. In addition to Branstad, Godfrey’s suit names five defendants, including the governor’s chief of staff, his communications director, the lieutenant governor and the director of Iowa Workforce Development.

“The suit has already cost the taxpayers of Iowa more than $500,000, and the bills will continue to roll in now that the Supreme Court has sent the case back to Polk County District Court for further review that adds to the complexity,” the Register editorialized in mid-June. “If the state loses this case, it will not only pay the growing legal bills to Des Moines attorney George LaMarca, who was hired to defend the state, but it may have to pay that much more to compensate Godfrey for his lost wages, personal suffering and his legal fees.”

Red Wing calls the debate over legal expenses an “interesting maneuver to pivot the conversation” from the real issue—the governor’s decision to make an example of the only openly gay official in the highest level of Iowa state government.

“Even people who may not be comfortable with a gay man holding a high position in the state may be more uncomfortable having the state spend so much money to defend itself,” she says.

Barring an out-of-court settlement, Iowa taxpayers can expect to foot the bill for additional legal costs in the months—perhaps years—ahead. 

In June, the Iowa Supreme Court reversed an earlier Polk County District Court ruling that dismissed the defamation claim against Branstad and five members of his administration. The Supreme Court ordered the case back to the lower court in a 5-2 opinion that rejected a claim that the defendants were exempt from civil recourse because the decision to reduce Godfrey’s salary was a function of their positions with the state. A U.S. judge later dismissed a companion lawsuit filed by Godfrey in federal court.

The toll exacted on Godfrey supersedes his reduction in pay. Time he had once hoped to spend with his father, who suffers from Parkinson’s disease, has instead been devoted to overseeing a legal matter now moving into its third year. Attorneys for Godfrey and the administration began taking depositions in the case over the summer. It is expected to go to trial in 2015.

Godfrey, as it happens, will be subjected to a long commute if or when the gavel falls. In early August he issued a surprise announcement that he was fulfilling Branstad’s wish by tendering his resignation. On Aug. 25, Godfrey began his new position as the chief judge with the U.S. Employees Compensation Appeal Board in Washington.

The “prestigious promotion,” Boulton says, “tells me that by any objective measure he was doing a good job.” 

Meanwhile, in the plaintiff’s absence, Godfrey vs. State of Iowa will continue to move forward.