                 IN THE SUPREME COURT OF IOWA
                               No. 07–1495

                          Filed March 13, 2009


JEFFREY GEORGE,

      Appellant,

vs.

D.W. ZINSER COMPANY,

      Appellee.



      On review from the Iowa Court of Appeals.



      Appeal from the Iowa District Court for Linn County, James H.

Carter, Judge.



      Employee challenges district court’s dismissal of his petition

asserting claims of retaliatory discharge and unpaid wages against his

former employer. DECISION OF COURT OF APPEALS AFFIRMED IN

PART AND VACATED IN PART; DISTRICT COURT JUDGMENT

REVERSED.


      Matt J. Reilly of Eells & Tronvold Law Offices, P.L.C., Cedar

Rapids, for appellant.



      Charles A. Blades of Scheldrup, Blades, Schrock, Sand, Aranza,

P.C., Cedar Rapids, for appellee.
                                       2

STREIT, Justice.

         After noticing his employer’s failure to take certain required safety

precautions      during   lead   abatement    jobs   in   violation   of   Iowa’s

Occupational Safety and Health Act (IOSHA), Iowa Code chapter 88

(2007), Jeffrey George filed a complaint with the Iowa Division of Labor

Services Occupational Safety and Health Bureau (the Division).              Soon

thereafter, his employment with the company was terminated. George
filed another complaint with the Division alleging retaliatory discharge in

violation of IOSHA as well as a claim for wrongful discharge in the

district court. The Division dismissed George’s complaint. The district

court also dismissed George’s complaint on the grounds of res judicata,

concluding the Division’s dismissal precluded further litigation on the

issue.     George appealed.      Because the Division’s investigation and

dismissal was not an adjudication, res judicata does not preclude

George’s action in the district court.       Further, the remedy provided in

IOSHA is not exclusive, and George may bring a common law action for

wrongful discharge in the district court.

         I. Background Facts and Prior Proceedings.

         On January 18, 2007, Jeffrey George filed a complaint with the
Division, alleging his employer, D.W. Zinser, violated provisions of

IOSHA.      The complaint arose out of violations George witnessed while

performing lead abatement jobs for D.W. Zinser in September and

October 2006.      As a result of a subsequent investigation, D.W. Zinser

was cited for eight serious IOSHA violations and assessed penalties on

February 8, 2007.

         On or around January 23, D.W. Zinser learned IOSHA complaints

had been filed against the company. Michael Zinser left two messages on

George’s voicemail that day indicating they needed to speak as soon as
                                     3

possible. On January 24, David Zinser told George he should return the

company truck that had been assigned to him, and there was no work

available for him.      On January 29, George met with David Zinser.

Following the advice of the Division, George carried a concealed recording

device. On February 1, George had another similar meeting. Although

much of the recordings was inaudible, it seems that David Zinser was

not going to give George work because of the IOSHA situation. George’s
employment with D.W. Zinser was subsequently terminated.

      In March, George filed a complaint with the Division alleging he

was discharged in retaliation for reporting unsafe working conditions.

On April 4, the Division dismissed George’s complaint. George appealed,

and the interim labor commissioner affirmed the dismissal.              The

commissioner found that George, along with other employees, was laid

off on January 12, before George filed his complaint regarding the IOSHA

violations.    George did not seek judicial review of the commissioner’s

decision under Iowa Code section 17A.19 (2007).

      On March 12, while the complaint was still under investigation,

George filed a lawsuit in the district court containing the same retaliation

claim as well as a claim for unpaid wages under Iowa Code chapter 91A
(2007).       After learning the Division dismissed George’s complaint,

D.W. Zinser filed a pre-answer motion to dismiss, arguing Iowa Code

section 88.9(3) provides the exclusive remedy for pursuing retaliation

claims under IOSHA, and the doctrine of res judicata bars George from

relitigating that issue in district court.   George resisted the motion to

dismiss and asserted the motion should be treated as a motion for

summary judgment because it relied on matters outside the pleadings.

The district court agreed and considered the motion to dismiss as if it

were a motion for summary judgment.           The district court dismissed
                                      4

George’s petition with prejudice on the grounds that “the final

adjudicatory decision of an administrative agency is entitled to res

judicata effect as if it were the judgment of a court.” The district court

declined to rule on whether the statutory remedies provided in Iowa Code

section 88.9(3) are exclusive because it identified the preemption issue as

“troublesome” and decided it would be clearer to dispose of the case on

grounds of res judicata. George appealed. The court of appeals affirmed,
concluding George had “a full and fair opportunity to litigate the

retaliatory discharge claim in the administrative proceedings in this

case.”     However, the court of appeals reinstated George’s wage claim

which had been dismissed by the district court.

         II. Scope of Review.

         As the motion to dismiss in this case relied on matters outside the

pleadings and both parties and the court treated it as a motion for

summary judgment, we will do so as well.          See Troester v. Sisters of

Mercy Health Corp., 328 N.W.2d 308, 311 (Iowa 1982) (recognizing, in

certain situations, where a motion to dismiss relies on matters outside

the pleadings, “the proper procedure is to treat the motion as one for

summary judgment”); see also Stotts v. Eveleth, 688 N.W.2d 803, 812
(Iowa 2004) (treating a motion to dismiss as a motion for summary

judgment to conserve judicial resources).

         A ruling on a motion for summary judgment is reviewed for

correction of errors at law. City of Johnston v. Christenson, 718 N.W.2d

290, 296 (Iowa 2006). Summary judgment is appropriate where there is

no genuine issue of material fact and the moving party is entitled to

judgment as a matter of law. Iowa R. Civ. P. 1.981(3).
                                     5

      III. Merits.

      A. Res Judicata. Today we determine whether an administrative

decision made after a brief investigation is a final adjudicatory action

entitled to preclusive effect. The doctrine of res judicata prevents a party

from relitigating a claim or issue that has already been determined by a

final judgment. Ashe v. Swenson, 397 U.S. 436, 443, 90 S. Ct. 1189,

1194, 25 L. Ed. 2d 469, 475 (1970); see also Christenson, 718 N.W.2d at
297. Res judicata, or claim preclusion, applies only when a party has

had a “full and fair opportunity” to litigate in the first trial. Spiker v.

Spiker, 708 N.W.2d 347, 353 (Iowa 2006). A party asserting res judicata

must establish the following:

      (1) “the parties in the first and second action were the same”;
      (2) “the claim in the second suit could have been fully and
      fairly adjudicated in the prior case”; and (3) “there was a
      final judgment on the merits in the first action.”

Id. (quoting Arnevik v. Univ. of Minn. Bd. of Regents, 642 N.W.2d 315, 319

(Iowa 2002)). A party asserting issue preclusion, or collateral estoppel,

must establish the following:

      (1) the issue concluded must be identical; (2) the issue must
      have been raised and litigated in the prior action; (3) the
      issue must have been material and relevant to the
      disposition of the prior action; and (4) the determination
      made of the issue in the prior action must have been
      necessary and essential to the resulting judgment.

Iowa Elec. Light & Power Co. v. Lagle, 430 N.W.2d 393, 397 (Iowa 1988)

(citation omitted).

      An agency determination will be entitled to preclusive effect in a

judicial proceeding “[w]hen an administrative agency is acting in a

judicial capacity and resolved disputed issues of fact properly before it

which the parties have had an adequate opportunity to litigate. . . .”

United States v. Utah Constr. & Mining Co., 384 U.S. 394, 422, 86 S. Ct.
                                     6

1545, 1560, 16 L. Ed. 2d 642, 661 (1966); see also Lagle, 430 N.W.2d at

397–98.     “[A] valid and final adjudicative determination by an

administrative tribunal has the same effects under the rules of res

judicata, subject to the same exceptions and qualifications, as a

judgment of a court.”       Restatement (Second) of Judgments § 83 (1)

(1982).   In determining whether the agency is acting in a judicial

capacity, we look to the factors set forth in the Restatement.

             (2) An adjudicative determination by an administrative
      tribunal is conclusive under the rules of res judicata only
      insofar as the proceeding resulting in the determination
      entailed the essential elements of adjudication, including:

                 (a) Adequate notice to persons who are to be
            bound by the adjudication . . . ;

                  (b) The right on behalf of a party to present
            evidence and legal argument in support of the party’s
            contentions and fair opportunity to rebut evidence and
            argument by opposing parties;

                   (c)   A formulation of issues of law and fact in
            terms of      the application of rules with respect to
            specified    parties concerning a specific transaction,
            situation,   or status, or a specific series thereof;

                   (d) A rule of finality, specifying a point in the
            proceeding when presentations are terminated and a
            final decision is rendered; and

                  (e) Such other procedural elements as may be
            necessary to constitute the proceeding a sufficient
            means of conclusively determining the matter in
            question, having regard for the magnitude and
            complexity of the matter in question, the urgency with
            which the matter must be resolved, and the
            opportunity of the parties to obtain evidence and
            formulate legal contentions.

Restatement § 83; see Bennett v. MC # 619, Inc., 586 N.W.2d 512, 517

(Iowa 1998). Our cases are in accord with the rationale set forth in the

comments to section 83 of the Restatement.
                                     7
      “Where an administrative agency is engaged in deciding
      specific legal claims or issues through a procedure
      substantially similar to those employed by courts, the agency
      is in substance engaged in adjudication.           Decisional
      processes using procedures whose formality approximates
      those of courts may properly be accorded the conclusiveness
      that attaches to judicial judgments.”

Bennett, 586 N.W.2d at 517 (emphasis removed) (quoting Restatement §

83 cmt. b).

      Another crucial factor the Restatement identifies in determining

whether res judicata applies to an agency action is whether the

individual is able to exert control over the proceeding.

      In some types of administrative proceedings, the victim of a
      statutory wrong may complain to the agency but not be given
      initiative or control of an enforcement proceeding. In such
      circumstances the agency rather than the victim is the party
      to whom the rules of res judicata apply.

Restatement § 83 cmt. c. Although our case law has not yet applied this

comment, we find the logic persuasive.

      The Division, in investigating George’s complaint and subsequently

dismissing it, was not acting in a judicial capacity.        Neither the

procedure nor the investigation meets the requirements to be granted

preclusive effect in a judicial proceeding. First, the procedure described
by statute itself does not bear much resemblance to an adjudication. To

begin the process, George filed a complaint as described under Iowa

Code section 88.9(3)(b)(1).

            (1) An employee who believes that the employee has
      been discharged or otherwise discriminated against by a
      person in violation of this subsection may, within thirty days
      after the violation occurs, file a complaint with the
      commissioner alleging discrimination.

George filed a complaint in March, complete with a list of witnesses to

contact and the tape recordings of the meetings with David Zinser.
                                     8

      As described in the statute, the administrative investigation

conducted by the commissioner does not have the characteristics of an

agency adjudication, as set forth in the Restatement.

             Upon receipt of the complaint, the commissioner shall
      conduct an investigation as the commissioner deems
      appropriate.    If, upon investigation, the commissioner
      determines that the provisions of this subsection have been
      violated, the commissioner shall bring an action in the
      appropriate district court against the person. . . .

Iowa Code § 88.9(3)(b)(2) (emphasis added).      The statute instructs the

commissioner to conduct an investigation and then to make a

determination whether there has been a violation.       Nowhere does the

statute mention presenting evidence or weighing legal arguments.

      Not only does the statutory description of the investigation lack the

characteristics of an adjudication, but the Division was not acting in a

judicial capacity during this specific investigation.    Cf. Bennett, 586

N.W.2d at 519 (holding res judicata applied where “the commission was

deciding issues through a procedure substantially similar to those

employed by courts and was thus engaged in adjudication”).             After

George filed the complaint, the Division sent a letter, dated March 26,

2007, to D.W. Zinser notifying it of the complaint and asking it to submit
a full and complete written account of the facts and a statement of its

position in regard to George’s termination. The letter also asked D.W.

Zinser to provide a copy of George’s personnel file, a list of all employees

working with George, and a list of individuals who may have information

pertaining to the case.   Only nine days later, on April 4, the Division

dismissed George’s complaint.       George claims the Division neither

contacted any of the witnesses he listed nor listened to the taped

discussions between George and David Zinser. There is no evidence of

any steps taken in this brief time that resemble an adjudication as
                                           9

contemplated in Restatement section 83. Cf. Utah Constr., 384 U.S. at

422, 394 S. Ct. at 1560, 16 L. Ed. 2d at 661 (the Advisory Board of

Contract Appeals was acting in a judicial capacity when it considered the

claim in question because “both parties had a full and fair opportunity to

argue their version of the facts and an opportunity to seek court review of

any adverse findings”).

      In our case, George did not have a full and fair opportunity to
present evidence or respond to D.W. Zinser’s position. He had little to no

control over the agency’s investigation.            The Division did not hold a

hearing on the issue.          It only conducted an informal nine day

investigation. The parties were not afforded a full and fair opportunity to

litigate the matter in dispute. The only participation by George in the

process was the filing of a complaint.              As George, “the victim of a

statutory wrong,” was not given “initiative or control of [the] enforcement

proceeding,” it seems inherently unfair to apply the doctrine of res

judicata to his claim. Restatement § 83 cmt. c.

      Cases from other states reveal that an agency’s investigative

findings are not granted preclusive effect.           In Parson v. Department of

Revenue, Alaska Housing Finance Corp., 189 P.3d 1032 (Alaska 2008), an
employee, Parson, filed a complaint with the Alaska State Commission

for   Human     Rights    alleging   his       termination   amounted   to   racial

discrimination and retaliation for numerous complaints.             Parson, 189

P.3d at 1034.    After an informal investigation revealed the allegations

were not supported by substantial evidence, the Commission dismissed

Parson’s complaint. Id. Parson then filed a complaint in superior court.

Id. at 1035. The Supreme Court of Alaska determined the doctrine of res

judicata did not bar Parson’s claim, because “an informal investigation
                                     10

by Commission staff does not contain the essential elements of

adjudication.” Id. at 1038. As the court pointed out,

       Closure of Parson’s case after an informal staff investigation
       without any kind of adversarial activity or decision on the
       merits by an independent fact-finder is not a “dismissal with
       prejudice” and does not give rise to issue or claim preclusion
       in a subsequent lawsuit in superior court.

Id. at 1038. It did not matter to the court that the agency action was a

final action subject to judicial review. Id. at 1037–38; see also Mac Home

Improvement Co. v. Cuyahoga Metro. Hous. Auth., 7 Wage & Hour Cas. 2d

(BNA) 1425 (Ohio Ct. App. 2000) (res judicata does not apply to an

investigative   report   by   the   Department   of   Labor     because   the

administrative investigation was not judicial in nature).

       Here the Division, in its investigation of George’s complaint and

subsequent dismissal, was not “deciding issues through a procedure

substantially similar to those employed by courts,” and thus, it was not

engaged in adjudication.      Bennett, 586 N.W.2d at 519.        At best, the

Division decided it did not want to pursue the case.          As the Division

conducted an investigation, not a hearing, the Division’s dismissal of

George’s complaint should not be given preclusive effect.

       B. Unpaid Wages Claim. In addition to the retaliatory discharge

claim, George also alleges D.W. Zinser failed to pay him wages in

violation of the Iowa Wage Payment Collection Law, Iowa Code chapter

91A.    The district court dismissed all claims on the grounds of res

judicata. The court of appeals reversed on the issue of unpaid wages,

concluding that res judicata did not apply since George never raised the

issue of unpaid wages in his complaint to the Division. We agree with

the court of appeals.     The district court erred in dismissing George’s

wage claim.
                                        11

       C.     Exclusive Remedy.        The district court declined to rule on

whether the statutory remedies provided in Iowa Code section 88.9(3) are

exclusive. In its ruling on the defendant’s pre-answer motion to dismiss,

the court stated that it “defers ruling on the alleged preemption defense

until the defendant has presented the preclusion defense . . . and a

ruling has been made thereon.           If that ruling favors defendant, the

preemption issue is moot.” However, since we are sending the case back
for a new trial, we will address the issue.

       Our court has yet to determine whether an individual can bring a

private cause of action for wrongful discharge in violation of the public

policy behind IOSHA. The Court of Appeals for the Eighth Circuit has

held “IOSHA presents a clear and well-recognized statement of public

policy” and can be the basis for bringing a private action for wrongful

discharge. Kohrt v. MidAmerican Energy Co., 364 F.3d 894, 899 (8th Cir.

2004).      After a careful review of IOSHA, Iowa Code chapter 88, we

conclude an individual can bring a claim of retaliatory discharge for

reporting IOSHA violations.

       An employee can bring an action for the tort of wrongful discharge

when     “a     protected   activity   has   been   recognized   through   the
implementation of an underlying public policy that would be undermined

if an employee were discharged from employment for engaging in that

activity.” Davis v. Horton, 661 N.W.2d 533, 535 (Iowa 2003). In order to

succeed on such a claim, the employee must demonstrate the following

four factors:

       (1) The existence of a clearly defined public policy that
           protects an activity.
       (2) This policy would be undermined by a discharge from
           employment.
       (3) The challenged discharge was the result of participating
           in the protected activity.
                                    12
      (4) There was a lack of other justification for the termination.

Id.

      The first factor is satisfied by the public policy set forth in Iowa

Code section 88.9(3), which states “[a] person shall not discharge . . . an

employee because the employee has filed a complaint . . . under . . . this

chapter.” In Fitzgerald v. Salsbury Chemical, Inc., 613 N.W.2d 275, 283

(Iowa 2000), we cited Iowa Code section 88.9(3) as an example of a

statute articulating public policy against discharging employees for

engaging in certain conduct that would give rise to a common law action

for retaliatory discharge.

      The fact that the statute creates an administrative remedy does not

indicate such a remedy is exclusive. The language in section 88.9(3) is

permissive.    “An employee who believes that the employee has been

discharged . . . in violation of this subsection may . . . file a complaint

with the commissioner alleging discrimination.” Iowa Code § 88.9(3)(b)(1)

(emphasis added); cf. Iowa Code § 216.16(1) (“A person claiming to be

aggrieved by an unfair or discriminatory practice must initially seek an

administrative relief by filing a complaint with the commission . . . .”

(Emphasis added.)). If the legislature had intended section 88.9(3) to be

the exclusive remedy and preclude a private cause of action, it could

have done so expressly.

      Although state courts and circuit courts are split on the issue of

whether OSHA and the state equivalents preclude common law claims for

wrongful discharge, the majority recognize the statutory remedies are not

exclusive.    Compare Schweiss v. Chrysler Motors Corp., 922 F.2d 473,

475 (8th Cir. 1990) (holding OSHA’s “remedial scheme does not pre-empt

[plaintiff’s] state law wrongful discharge action”); Flenker v. Willamette

Indus., Inc., 967 P.2d 295 (Kan. 1998) (remedy provided by OSHA does
                                          13

not preclude a common law claim for retaliatory discharge); Kinzel v.

Discovery Drilling, Inc., 93 P.3d 427 (Alaska 2004) (plaintiff brought

common law claim for retaliatory discharge for filing AKOSH complaints);

Cabesuela v. Browning-Ferris Indus., 80 Cal. Reptr. 2d 60 (Cal. Ct. App.

1998) (state’s OSHA statute is not an exclusive remedy, and plaintiff

permitted to bring common law action for retaliatory discharge), with

Hines v. Elf Atochem N. Am., Inc., 813 F. Supp. 550 (W.D. Ky. 1993)
(OSHA and the state’s version preempt a private cause of action for

wrongful discharge); Miles v. Martin Marietta Corp., 861 F. Supp. 73 (D.

Colo. 1994) (“Colorado law is clear that a separate public policy wrongful

discharge claim is not available where the statute at issue provides a

wrongful discharge remedy.”).

       We hold that the remedy set forth in Iowa Code section 88.9(3)

does not preclude an employee from bringing a common law action for

wrongful discharge.        The policy of encouraging employees to improve

workplace safety and the fact that the statute contains permissive and

not mandatory language point in favor of allowing a common law action.

Iowa Code §§ 88.1, 88.9(3).1

       IV. Conclusion.
       The Division’s investigation of George’s complaint and subsequent

dismissal was not an adjudication.             Therefore, res judicata does not

preclude George’s common law action for wrongful discharge in the

       1George   was not required to exhaust all administrative remedies and appeal for
judicial review under Iowa Code section 19A.19 before bringing his common law claim.
The language of Iowa Code section 88.9(3)(b)(1) indicates the administrative remedy is
permissive. See Riley v. Boxa, 542 N.W.2d 519, 522 (Iowa 1996) (“[T]he exhaustion of
administrative remedies doctrine does not apply if, by the terms and implications of the
statutes authorizing an administrative remedy, such remedy is permissive only or not
exclusive of the judicial remedy, warranting the conclusion that the legislature intended
to permit resort to the courts even though the administrative remedy has not been
exhausted.” (Quotation marks and citation omitted.)).
                                   14

district court or his wage claim under chapter 91A. George’s wage claim

is thus reinstated.    Further, the remedy provided in IOSHA is not

exclusive, and George may bring a common law action for wrongful

discharge in the district court.

      DECISION OF COURT OF APPEALS AFFIRMED IN PART AND

VACATED IN PART; DISTRICT COURT JUDGMENT REVERSED.
