Arbitrator reverses Workforce Development decision, raises questions about agency management

Associated Press

An arbitrator has ruled that Iowa Workforce Development Director Teresa Wahlert overstepped her bounds when she promoted a judge who had been demoted after complaints that she created a hostile work environment.

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The arbitrator's decision settles a dispute between the American Federation of State, County and Municipal Employees, the union that represents state workers, and IWD. It's also another setback for Wahlert, the embattled head of the agency that oversees benefits for unemployed workers and job training programs.

The union filed a grievance in May 2013 on behalf of Marty Alexander, a state employee representing a group of IWD clerical workers. His grievance alleged Teresa Hillary, an administrative law judge who heard unemployment cases, intimidated and harassed staff, creating a hostile work environment.

"I have seen my co-workers cry, develop fears of harassment and near nervous breakdowns," he said Tuesday. "I fear for my former co-workers because some are so scared that they cannot come forward."

In June 2013, Joe Walsh, who was the top administrative law judge at the agency, settled the grievance by demoting Hillary for at least a year to a role in which she could not manage other staffers.

Soon after his decision, Walsh was laid off by Wahlert, who then appointed Hillary and a few other administrative law judges as lead workers, supervisory positions with additional pay. So the union filed another grievance, claiming Hillary's promotion violated Walsh's order. It was denied by the state, and the union sought arbitration.

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Arbitrator Sharon Dendurent, in a ruling filed Friday and obtained by The Associated Press, said Hillary should not have been given the management job last year and ordered her demoted to her previous job for one year.

Dendurent concluded that the initial grievance was settled properly by Walsh and that Wahlert did not have the authority to reverse it.

"Such 'second guessing' of an authorized management decision after the fact cannot be condoned," she wrote.

Neither Wahlert nor Hillary responded Tuesday to requests for comment.

Dendurent wrote the conflict raises questions about the operation and morale of IWD. It's not the first time such questions have surfaced.

Sen. Janet Petersen, the Democratic leader of the Senate Government Oversight Committee, called Wahlert, Hillary, Walsh and other IWD workers to testify before the committee this summer about worker complaints of a hostile work environment and other problems at IWD.

Branstad's spokesman Jimmy Centers said the governor is pleased with the Wahlert's leadership.

Wahlert was first appointed by Branstad in 2011, and he continued to support her as she came under intense criticism during the committee hearings when it was alleged she pressured administrative law judges to side with employers in unemployment cases and violated the long-held standard of judicial independence when Walsh was laid off and she took over direct supervision of judges.

Walsh is suing the state and Wahlert over his dismissal. A trial has been set for next September.