Retaliation – The Final Steps to Termination (Part 3)
HomeFirst’s case
against me evolved during 2013 and 2014.
In May and June of 2013, I was an irritant to CEO Jenny because of my
repeated references to financial losses and my insistence that significant
operational changes were necessary. In
August 2013 I offended the Board Chair when I challenged her “no red flag”
comment (1st Issue), and Jenny aligned herself with the Chair as
co-Mike-sufferers. But something else
was still necessary to justify firing me.
On March 18, 2014 Chief Program Officer Hilary sent an email
to the rest of senior management – Jenny, the Development Officer, and me – complaining that my recent analyses were excessively critical of Development and Programs. I clearly had little respect and esteem for
the rest of the team, she said, and little concern for the success of the
agency. The negative culture within our
group would eventually seep into the rest of the organization. Jenny passed the email to the CEO of a major
supporting foundation, and he congratulated her on the gift. He encouraged her to write me up, every day
if necessary.
At our March 24 meeting, Jenny thanked Hilary for her honest
email. Hilary cried, said it was not a
“Mike problem,” and admitted that she had failed at her own performance
reporting. The Development Officer said
the problem was less my reports than her and Hilary’s ability to respond. Jenny was unmoved. The meeting petered out without a clear
victory for anyone.
On Tuesday morning, March 25, I wrote to Jenny that during
the prior day’s meeting we had not discussed the most pressing problem, other
than running out of money: the many, significant compliance problems. And, by the way, I had disclosed the residential
licensing (2nd Issue) and bid collusion (4th Issue)
problems to authorities. That set things
off.
Thirteen minutes later the Chair told Jenny that she was not
surprised. By that afternoon Jenny and
the Executive Committee of the Board had decided to meet with me to discuss my
concerns. The Chair told them that she
would talk to a company attorney the next morning. That evening one Board member on the team argued
that I had been insubordinate and had disobeyed the Chair’s order to let them handle
problems; Jenny replied, thanks.
On Wednesday morning, the Chair distributed notes from her
conversation with the attorney: I had evidently taken a “Whistleblower 101”
class; they should fire me immediately because things would only get worse, and
I would continue to sabotage the company; if I reneged on my plan to retire,
the risk would increase significantly; he recommended paying me through the end
of the year. Jenny and the Board Treasurer
began contacting possible interim CFOs.
That afternoon, the Chair told the attorney that everyone
was in favor of firing me immediately based on insubordination. She asked if they should meet with me in
order to demonstrate their due diligence on compliance matters. He replied that it was better to give no
reason for the termination; in any case, they were in trouble on a
whistleblower claim. Meeting with me
would just make things worse, he said.
That evening the Treasurer and the former Chair argued that unwillingness
to be a constructive team member, not insubordination, was the best reason for
termination. Still later that evening, two
members with large company experience suggested it would be unusual to rush
into the termination; Jenny emailed the Chair asking for help getting the group
back on track.
Thursday morning, Jenny told the Chair and Treasurer that
she had been planning to terminate me based on my tone and manner, but the
whistleblower disclosures had pushed her to move faster. She told the group my salary and benefits
costs and confirmed that insurance could cover everything. At the end of the day, one member pressed
that they needed to resolve this untenable working relationship with me as soon
as possible.
Within three days of my admission to being a whistleblower,
Jenny and the team had decided to eliminate me but details still had to be agreed. Timing was one
concern. Most were eager or at least
open to move quickly; two favored taking longer. The attorney argued repeatedly for prompt
action so that they stayed in control of the situation, and he figured that my
whistleblower claim would not get much weaker with time. Jenny assured the Board that she and the
Program Officer were responding to the compliance problems; that my possible
sabotage would be controlled. In the
meantime, she and the Treasurer continued the search for an interim CFO to
replace me when needed.
Risks accompanied a quick termination approach: the end of the
fiscal year was approaching, my financial staff was small, and I created
analyses and numerous entries to close the books and prepare for the audit
fieldwork that would begin in the first week of August. But a quick termination offered benefits as
well. I had discomforted Jenny and the
Audit Committee a year earlier when I hesitated to sign the management
representation letter without disclosure of the residential licensing
problem. They could suppose that I had
several items I would want to review with the auditors before signing the 2014
letter. Firing me before the audit could
move those awkward discussions off the table.
The reason for termination was a second concern. Initially the participants responded
enthusiastically to insubordination as the reason, but the attorney was firmly
against that basis because it was vulnerable to a whistleblower retaliation
claim. He also advised against Jenny’s
suggestion of my “poor tone and language” because that, too, could be tied to
retaliation. Jenny was confident that
she could amass evidence of my failure to perform my job. She had started that accumulation in a
special email folder, and it would expand in time.
The third concern was severance. The attorney advised a negotiated severance
agreement. The cost would increase if I
withdrew my plan to retire, he thought, but if they moved quickly it could be
managed. But HomeFirst’s cash was low and
projected to get perilously low in the coming months. It would be dangerous to make a payment that
the attorney thought reasonable. Bounteous
insurance coverage, though, made the distasteful task of negotiating with me
unnecessary. It would be easier just to
let the insurance policy handle the matter.
The Board members talked among themselves, with Jenny, and
with the attorney, but none contacted me to discuss the compliance violations I
claimed to have identified and the culture that I claimed supported those
violations. Instead, guided by the
attorney’s advice to stay clear of me, they relied on explanations that Jenny
provided. They trusted Jenny.
At the start of April, the Governance Committee drafted new
Articles of Incorporation for approval by the Board later in the month. The revised Articles provided that the “liability of the directors of
this Corporation for monetary damages for breach of fiduciary duty as a
director shall be eliminated to the fullest extent permissible under California
law.” Although the insurance policy and
California law already shielded them against threats like whistleblower suits,
they were now triply protected as they moved forward.
No comments:
Post a Comment