Confidential
Settlement – $330,000Court
Contra Costa Superior
Attorneys
Plaintiff
Defendant
Experts
Plaintiff
Phillip H. Allman III, Ph.D.
(technical)
Facts
The plaintiff worked for eight years as a mechanic for the defendant Sanitary District in Oakley. He made several oral, internal complaints about health and safety issues, the impropriety of board members and employees using district property, equipment, vehicles and tools for their own personal benefit, and conflicts-of-interest by certain board members. He filed a complaint with CAL-OSHA in July 2002 which found no violations. He also disclosed information to the District Attorney for Contra Costa in August 2002. The latter initiated a criminal investigation of the district and had a grand jury hear testimony by the plaintiff, board members and employees of the district in late October 2002. The district put the plaintiff on administrative leave on Nov. 22, 2002 and fired him effective Dec. 3, 2002. The alleged grounds for termination were (a) insubordination for refusing to submit a confidential, detailed report as required by district ordinance under penalty of perjury to the district in August and November 2002 after he agreed to do so and was given two days paid time off to do so about his allegations of gross misconduct, abuse of authority, significant waste of funds and substantial and specific danger to health and safety, and (b) making false oral allegations. By letter dated Dec. 4, 2002, James Sepulveda, Senior Deputy District Attorney, informed the district that he found that the District Board had routinely approved of the district doing business with entities owned by a board member, in violation of Gov. Code Section 1090, a felony. He also found that the district had a practice of allowing board members and employees to use district property for their own personal benefit, in violation of Penal Code Section 504 (felony of embezzlement of public funds/property). However, the District Attorney declined to prosecute. The district's position was (a) past, not-current board member businesses were used by district managers on small transactions for convenience, which practice was overt and in good faith, and had stopped long before the plaintiff complained; (b) use of tools and equipment by employees, including the plaintiff (who had abused this policy himself), served district purposes as a perk of employment which encouraged retention and maintenance of the items. Sepulveda thought, and the district disagreed, that board members had relied on erroneous legal advice from a specialist in the field advising outside legal counsel. Sepulveda also felt there were statute of limitations problems. Also, during the pendency of the criminal investigation, the board had made several major policy changes to address those issues.
Result
The Contra Costa grand jury continued its investigation of the district and issued a report dated June 9, 2003. It concluded inter alia that the district had operated without by laws which are not required by state law or governing procedures other than those set forth in the legislative scheme regulating sanitary districts since its formation in 1992, had not followed the conflict of interest policy, had weak internal controls and needed to reform its business practices to improve accountability and reduce potential liability. The grand jury also concluded that the district's business practices needed continued development to reflect its evolution from a rural/agricultural environment to the fast-growing, suburban homeowner area that it serves today, but that the district operated an adequate sewage collection and treatment facility utilizing creative solutions in the operation of its system. The plaintiff's lawsuit against the district alleged wrongful termination on several theories: violation of various whistleblower statutes and violations of the public policy embodied in such statutes or constitutional provisions; CA Labor Code Section 1102.5 (whistleblower protection statute); Labor Code Sections 6400 and 6310 (no retaliation for making a safety or health complaint); the free speech provision of the CA constitution; and Gov. Code Section 53296 (whistleblower protection for employees of local public agencies).
Other Information
The case was settled at a mediation with Michael Loeb of Bingham McCutchen in San Francisco.
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