Factory manager Matthew Jahnke was transferred back to Iowa from his Harbin, China assignment and demoted following an internal investigation that found his sexual relationships with two Chinese women under his authority violated Deere’s code of conduct, according to court records.
Jahnke sued his employer under the Iowa Civil Rights Act, alleging disparate treatment based on his age and sex.
The Iowa Supreme Court dismissed the lawsuit in a 5-0 decision issued Friday.
The justices said the protections of the Iowa Civil Rights Act do not extend beyond the state’s borders, and neither the employee nor the employer was located in Iowa for the purposes of Jahnke’s claims.
Deere & Co. has factories in Iowa, but its corporate headquarters is in Moline, Ill., just across the Mississippi River from Davenport, Iowa.
Jahnke was represented in his appeal by Paige Fiedler of Fiedler & Timmer in Johnston, Iowa, who did not immediately respond Monday to a request for comment.
Deere & Co. was represented in the case by Frank Harty and Debra Hulett of Nyemaster Goode in Des Moines.
Company spokesman Ken Golden said in a statement, “Deere is pleased with the decision of the Iowa Supreme Court in this matter and we believe the decision and finding of the Court speaks for itself.”
Jahnke has worked for Deere & Co. since 1998 in a number of Midwest locations, most recently in Ankeny, Iowa, court records show.
He was transferred to Harbin, China, in 2011 to oversee construction of a new factory there and to become plant manager when it was completed. He sold his Iowa home and established residence in China under the terms of his employment contract.
In 2014, Deere & Co. International officials based in China conducted an investigation into Jahnke’s sexual relationships with two female Chinese employees – one of whom was a financial controller assigned to him, and the other a contract employee hired as a language tutor – and recommended disciplinary action.
Deere officials agreed and reassigned Jahnke to the company’s factory in Waterloo, Iowa, demoted him and reduced his pay.
Jahnke argued in his lawsuit that he was treated differently because of his age – he 60 at the time of his demotion. He also claimed he was treated differently as a Caucasian male than the two younger Chinese women, who were not similarly disciplined.
The Iowa Supreme Court ruled, however, that the Iowa Civil Rights Act does not extend beyond the Hawkeye State.
“It is a well-settled presumption that state statutes lack extraterritorial reach unless the legislature clearly expresses otherwise,” Justice Bruce Zager wrote for the court. “Nothing in the language of the [Iowa Civil Rights Act] expressly states or indicates that it applies extraterritorially.”
In contrast, Zager wrote, the Legislature included explicit language in both the Iowa Tort Claims Act and the workers’ compensation law stating that those statutes apply outside the territorial limits of Iowa.
Jahnke argued that he was nonetheless protected by the Iowa Civil Rights Act because he is a citizen of the state working on temporary assignment in China who was discriminated against by a decision made by Deere officials in Iowa.
But the court disagreed because his employment relationship was rooted in China, the decision to move him back to Iowa was initiated by an investigation completed in China, and it was carried out by company officials based in Illinois.
“Nothing in this record supports a conclusion that the focus of this employment relationship was Iowa,” the ruling states. “Similarly, Jahnke cannot show that any discrete discriminatory employment action took place in Iowa. The only ties that Jahnke had to Iowa were intermittent trips to Iowa while he was living and working in China and a post office box to receive mail.”
The justices added that nothing in the Iowa Civil Rights Act indicates that it applies to discriminatory claims on the basis of “tangential relations with Iowa in cases where the alleged discrimination took place outside of Iowa.”
Two judges of the seven-member Iowa Supreme Court did not participate in the decision.