## Facts

- Kubota Tractor Corporation employed Jake Runyon as a regional sales manager starting in 1977, initially while he lived in Des Moines, Iowa.
- Runyon later moved to Missouri but continued to service a territory including Iowa, remaining responsible for nine Iowa dealerships and regularly traveling to Iowa, contacting dealers, and attending trade shows there.
- Runyon’s compensation included a fixed salary, guaranteed sales commissions, and a discretionary “Management by Objective” (MBO) bonus.
- Kubota financed dealer inventory; when inventory was sold, dealers were expected to pay off the financing, and unpaid amounts could result in losses to Kubota.
- In 1999, Kubota deducted $3,979 from Runyon’s MBO bonus based on inventory-related losses tied to unpaid dealer accounts within his territory.
- Runyon claimed the deduction unlawfully shifted customer credit-default losses to him in violation of Iowa wage-payment restrictions.

## Issues

1. Whether Iowa Code chapter 91A applied to a wage dispute involving an employee living in Missouri who performed substantial work connected to Iowa for an out-of-state employer.
2. Whether the $3,979 reduction to Runyon’s bonus constituted a prohibited deduction for “losses due to … default of customer credit” under Iowa Code § 91A.5(2)(c).
3. Whether liquidated damages were available under Iowa Code § 91A.8 for an intentional failure to pay wages, notwithstanding prior case law relied on by the district court.

## Decision

- The court held Iowa Code chapter 91A applied because the employment relationship and wage dispute had substantial connections to Iowa.
- The court affirmed the jury’s finding that the bonus reduction was a prohibited deduction for losses due to customer credit default under § 91A.5(2)(c).
- The court reversed the categorical denial of liquidated damages, holding § 91A.8 permits liquidated damages when wages are intentionally withheld in violation of chapter 91A.
- The judgment for unpaid wages and trial-level attorney fees was affirmed; the case was remanded for liquidated damages and appellate attorney fees.

## Legal Principles

- Iowa Code chapter 91A may apply to wage disputes involving out-of-state employers and nonresident employees when the employment and wage-payment dispute have substantial Iowa ties.
- Iowa Code § 91A.5(2)(c) bars wage deductions that shift to employees losses attributable to customer credit default; deductions tied to unpaid dealer accounts can fall within this prohibition.
- Iowa Code § 91A.8 authorizes liquidated damages for an employer’s intentional failure to pay wages due under chapter 91A; prior precedent does not create a categorical bar to such damages.

## Conclusion

The court applied Iowa’s wage-payment statute to an interstate employment relationship with substantial Iowa contacts, upheld a jury finding that Kubota unlawfully reduced a bonus to recoup dealer credit losses, and held that intentional statutory nonpayment can support liquidated damages and additional attorney-fee awards.


Runyon v. Kubota Tractor Corp., 653 N.W.2d 582 (Iowa 2002)