Former administrative law judge sues state, Iowa Workforce Development Director Wahlert

The former Chief Administrative Law Judge for Iowa Workforce Development filed suit yesterday in Polk County District Court against the State of Iowa and Iowa Workforce Development Director Teresa Wahlert. You can read the full text of Joseph Walsh’s lawsuit here (pdf). After the jump I’ve posted an excerpt from his case. Walsh alleges that the IWD director “interfere[d] with the administrative judicial process in order to favor employers,” attempted “to illegally strip [Walsh] of his merit protection,” and eventually retaliated by removing him in “a political reorganization disguised as a budget layoff.”

I’ve also enclosed below a statement Wahlert released yesterday, denouncing the “frivolous lawsuit.” Wahlert contends that while serving as chief administrative law judge, Walsh failed in basic management responsibilities.

Last month, Democratic State Senator Bill Dotzler asked the U.S. Department of Labor to investigate claims that Wahlert interfered with the work of Iowa’s administrative law judges, hoping to secure more favorable outcomes for employers in unemployment cases. Governor Terry Branstad rejected Dotzler’s allegations against Wahlert without conducting any internal review of the matter.

At a press conference in Des Moines on April 3, Walsh asserted that “in many ways this administration is tearing the Department of Workforce Development down.” Wahlert’s agency was at the center of political controversy in 2011, when the Branstad administration moved to replace dozens of Iowa Workforce Development field offices around the state with hundreds of computer terminal access points. That reorganization led to a lawsuit and eventually an Iowa Supreme Court ruling that the governor had overstepped his authority by striking legislative language about the IWD offices without vetoing the money allocated to fund those offices.  

Excerpt from Joseph Walsh’s lawsuit against the State of Iowa and Iowa Workforce Development Director Teresa Wahlert:

Joseph L. Walsh graduated with Honors from Drake University Law School in 1996 after which he practiced with the prestigious labor law and workers’ compensation law firm then known as the Hedberg Law Firm, which eventually became Hedberg, Owens, Hedberg & Walsh, P.C., when Walsh became partner. In 2007, Governor Chet Culver appointed Walsh to the position of Deputy Director of Iowa Workforce Development. Given Walsh’s years as an attorney specializing in labor law and workers’ compensation, being able to serve the governor and the citizens of the state in that capacity was a humbling honor for Walsh. In 2011, Walsh accepted the position of Chief Administrative Law Judge of the Unemployment Appeals Bureau, a position where he could perform public service and utilize his legal skills. As Chief ALJ, Walsh reported to Teresa Wahlert. It became apparent to Walsh at some point that Wahlert sought to interfere with the administrative judicial process in order to favor employers. Over time, Wahlert’s efforts in this regard became more overt and focused. Walsh repeatedly advised Wahlert not to interfere with the administrative judicial process. Walsh saw his role as serving as a buffer between Wahlert, a political appointee, and the administrative judicial process, an unbiased, nonpolitical legal process. Walsh understood his obligation to the agency and the Director was to protect Wahlert from interference while providing her with legitimate advice and information she needed to run the agency. Walsh advised Wahlert her role was to propose legislation and engage in rulemaking, not to direct ALJ decision-making through policy or improper influence. As Wahlert’s efforts intensified, Walsh became a forceful buffer and stumbling block to her efforts to exert improper authority over the ALJs and the administrative judicial process. By 2013, Wahlert undertook efforts to marginalize Walsh and exert more authority and control over him. This culminated in her efforts to illegally strip him of his merit protection, a bedrock requirement of federal labor law for any judge deciding unemployment cases. By June 2013, Walsh believed he had no choice but to go to the United States Department of Labor for help. Wahlert was compelled to relent and restore Walsh’s merit status. In retaliation, Wahlert included Walsh in an agency layoff which affected a number of employees. Wahlert’s inclusion of Walsh in the layoff, however, had nothing to do with budget savings but rather was a political reorganization disguised as a budget layoff. Walsh alleges, as set out in more detail below, that his inclusion in the layoff was a rouse to disguise the reason for his termination: because he had engaged in conduct protected by Iowa Code § 70A.28, illegal retaliation under the Iowa whistleblower protection law. Wahlert also included Walsh’s spouse, Venus Vendoures Walsh, in the layoff.

April 3 press release from Iowa Workforce Development:

Walsh Files Frivolous Lawsuit Against the State of Iowa and Teresa Wahlert

DES MOINES – Former Chief ALJ, Joe Walsh, has filed a frivolous lawsuit against the State of Iowa and IWD Director, Teresa Wahlert. This is an attempt to draw attention away from the elimination of the Chief ALJ position due to federal budget cuts and the poor performance of the UI Appeals Bureau.

“It’s unfortunate that once again Mr. Walsh is making baseless accusations that cannot be supported with facts,” stated Wahlert. “Now, through this latest attempt, he is wasting the time of Iowa’s court system.”

Mr. Walsh states in his suit that Director Wahlert tried to influence Labor Commissioner Michael Mauro to end his contract with Mr. Walsh for the Athletic Commissioner duties.

“Upon hearing of Mr. Walsh’s departure from the agency, I asked Director Wahlert if he was laid off or fired,” stated Commissioner Mauro. “She immediately replied ‘laid off’ and I stated my intentions to keep Mr. Walsh under contract as the Athletic Commissioner. Director Wahlert’s immediate response was ‘that’s perfectly fine’,” said Mauro.

In the lawsuit, Mr. Walsh states the primary function of the Chief ALJ is management. Walsh never provided any of his employees with a state required annual performance review in his two and a half year tenure. Additionally, Mr. Walsh failed to ensure the Bureau was meeting the mandatory US Department of Labor metrics of deciding at least 60 percent of the cases within a 30 day time period. This led to the agency being placed on a corrective action plan by DOL in September of 2012 and caused Iowa to receive reductions in federal funding intended to support Iowans. During this time, the state’s ranking by DOL had plummeted to 47th in the nation. Fortunately, the process improvements that have taken place since August 2013 have brought the Bureau to 12th in the nation.

Despite Mr. Walsh’s tenure with state government, he fails in a basic understanding of the AFSCME contract. IWD offered Mrs. Venus Walsh an alternate position in the agency as outlined in the contract layoff process. Mrs. Walsh freely chose not to accept the position and she choose to be laid off.

The lawsuit alleges that Director Wahlert has attempted to influence the ALJs to rule more frequently in the favor of employers. The data from the Department of Labor proves otherwise.

Mr. Walsh had the responsibility to ensure that every case is heard in a timely and appropriate manner. Mr. Walsh himself never managed to attain the DOL requirement of 60 percent of the cases receiving a decision within 30 days for his caseload. In fact, Mr. Walsh had cases where parties waited 56 days, 69 days, 159 days and even 216 days for his decision.

Finally, Mr. Walsh contends within his lawsuit that he was treated differently than others during the layoff. Again, this is a false statement as all non-contract, managerial staff were escorted from the building in the same manner, the same day.

“The number of factual inaccuracies in Mr. Walsh’s lawsuit is staggering” stated Wahlert. “As Senator Dotzler previously stated, ‘facts are stubborn’.”

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