Attorney sues state for alleged defamation, wrongful discharge

An Iowa-licensed attorney fired from a state agency is now suing the state for defamation and wrongful discharge, among other allegations. (Photo by simpson33 via iStock / Getty Images Plus)

An Iowa-licensed attorney who was fired from the Iowa Department of Health and Human Services is now suing the state for alleged defamation and wrongful discharge.

Attorney James Sheets of Des Moines worked for Iowa DHHS, then known as the Iowa Department of Human Services, only briefly, from June 10, 2022, until Aug. 19, 2022.

He recently sued the state and asked that the court seal his entire petition from public view on the grounds that it contains unspecified “personal, sensitive” information. District Court Judge Scott D. Rosenberg consented to the request and sealed the petition. However, the state’s response to Sheets’ petition remains public and sheds some light on Sheets’ claims.

According to the state, Sheets was hired as a “supplemental payment regulatory advisor,” with a job classification of “attorney,” and an annual salary of $99,000. After he was hired, the state alleges, Sheets immediately began identifying himself as an attorney for DHHS in correspondence and in his automated email signature.

The state alleges Sheets’ supervisor, along with Medicaid Director Elizabeth Matney and Deputy Medicaid Director Julie Lovelady repeatedly asked Sheets to stop referring to himself as a DHHS attorney and instructed him to remove any such references from his email signature.

Each time, the state alleges, Sheets insisted his position was a legal role and that efforts to “reclassify” him to a non-legal role were improper and a potential violation of the Iowa Rules of Professional Conduct that apply to Iowa-licensed attorneys.

On Aug. 18, 2022, while still in his probationary period of employment, Sheets was informed he was being discharged.

The state’s court filings indicate Sheets is now suing DHHS for defamation related to statements made on the department’s employee separation form that allege he was terminated for “experience, skills and work effort (that) were not a good fit for the position.” He’s also claiming negligent supervision due to his supervisor being a non-lawyer, wrongful discharge, and tortious interference.

The state denies any wrongdoing and is seeking dismissal of the case, alleging in part that Sheets failed to exhaust his administrative remedies before filing the lawsuit.

Sheets did not immediately respond to calls from Iowa Capital Dispatch.