- Associated Press - Thursday, April 3, 2014

DES MOINES, Iowa (AP) - Iowa Workforce Development Director Teresa Wahlert sought to favor employers over workers in unemployment benefits decisions, and then fired the department’s chief judge when he opposed her efforts, according to allegations in a lawsuit filed Thursday.

Wahlert illegally stripped Joseph Walsh, chief administrative law judge of the unemployment appeals bureau, of job protections and then laid off Walsh and his wife after he told her not to influence the work of judges who are supposed to be independent, Walsh alleges in the lawsuit.

Walsh’s layoff “was a thinly disguised means of hiding the motive for terminating him: the fact that Walsh had stood up to efforts to bully and control him and other judges as a means of pursuing an anti-employee agenda,” including complaints to the U.S. Department of Labor, the lawsuit says.

Walsh said during a press conference Thursday that he did not want to file the lawsuit, and he knows it will cause people to become concerned with the administrative judicial process at Iowa Workforce Development.

“I did everything in my control to prevent it from getting to this point,” he said. “But I have come to the conclusion that if good people do not speak up and we just sit by silently while this administration interferes with the sanctity of the judicial processes, then we are just as guilty as she is.”

Walsh later added that he felt that people were still getting fair hearings through the department, saying the judges make decisions based on the law.

Wahlert called the lawsuit frivolous and filled with inaccuracies, insisting Walsh was fired due to a budget shortfall and accusing him of poor performance.

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

Democrats last month asked the Labor Department to investigate allegations that Wahlert, an appointee of Republican Gov. Terry Branstad, was improperly pressuring judges to favor employers during disputes over unemployment benefits. Branstad, who called Wahlert “an outstanding department head” Thursday, is also under fire over accusations that Democratic employees have been targeted for politically motivated layoffs.

Wahlert took over the job supervising unemployment appeals judges after firing Walsh last year. Sen. Bill Dotzler, D-Waterloo, has alleged that Wahlert demands tallies of how often a judge decides in favor of employers and has called for judges to create tip sheets to help employers win cases. Walsh made the same claims during his press conference.

Wahlert denied allegations of improper meddling, and Branstad said the criticism was based on “inaccurate and faulty information.”

Walsh had been deputy director of Iowa Workforce Development under Democratic Gov. Chet Culver from 2007 to 2010. After Branstad took office in 2011 and appointed Wahlert as director, Walsh moved into a nonpolitical position leading the bureau with a dozen judges who make thousands of unemployment benefits decisions annually.

Walsh’s lawsuit claims Wahlert’s agenda of favoring employers “became more overt and focused” over time. Walsh said at the press conference that an example of that was when Wahlert tried to make him talk to judges about finding uniformity on how to rule on some cases.

As a merit employee, he said that he saw himself as a buffer between Wahlert, a political appointee, and a judicial process that is supposed to be unbiased. Walsh advised Wahlert it was her job to propose legislation and administrative rules, not to influence judges’ decisions, and he became a “stumbling block to her efforts to exert improper authority,” the lawsuit said.

In April 2013, Walsh and several other employees received notice from the agency that it intended to convert their jobs into political appointments. Walsh challenged the decision, saying it would violate federal law and guidance. Nonetheless, his position was changed a month later.

Walsh complained to the Labor Department, which agreed that administrative law judges must be merit employees as long as they hear cases.

In response, Wahlert said that Walsh would stop hearing appeals and he would only be a manager. He opposed that idea and complained to Branstad’s office, the labor department and the agency’s board in June 2013, the lawsuit said.

The next month, the agency laid off Walsh and his wife, Venus, a program coordinator who had worked for IWD since 1999. They were told their jobs were eliminated to address a budget shortfall. But the lawsuit claims that wasn’t true because Walsh’s bureau was under budget and his wife’s job was fully funded.

Walsh claims that the retaliation continued after his layoff, with Wahlert unsuccessfully trying to block his return to work under Workers’ Compensation Commissioner Chris Godfrey. Godfrey has filed a separate lawsuit that alleges Branstad improperly slashed his salary and discriminated against him after he refused to resign in 2011.

Dotzler said he has spoken with Walsh and found him “absolutely credible.”

But Wahlert denied Walsh’s allegations and lobbed some of her own. She alleged that Walsh didn’t complete required performance reviews of subordinates and failed to ensure the bureau met a federal goal of deciding 60 percent of cases within 30 days, leading to corrective action and a cut in federal funding in 2012.


Foley reported from Cedar Rapids. AP reporters Tom Beaumont and Kourtney Liepelt contributed.

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