On Monday, the Coffee County Commission approved a settlement of nearly $1 million to be paid to former county employee Melinda Keeling and Jerry Gonzalez, her attorney, to end a years-long wrongful termination lawsuit.
The following day, the county’s budget and finance committee set to the task of figuring out how to pay that bill, using taxpayer dollars.
Under the terms of the approved settlement, Coffee County agreed to pay Keeling $982,500, if paid by Dec. 31, 2018 or $985,000, if paid in two installments – the first due Dec. 26 and the second payable by Jan. 31, 2019.
Keeling was employed by the Coffee County Department of Codes and Safety from 2006 to 2010. Following her dismissal, she filed a claim alleging the county violated Public Employee Political Freedom Act (PEPFA).
Keeling contended she was disciplined and fired because she brought her concerns to then-mayor David Pennington about her supervisor, Glenn Darden, being unavailable to answer questions and address concerns brought into the office by the public.
According to PEPFA, it’s unlawful for any public employer to discipline or discriminate against an employee because the employee exercised his or her right to communicate with an elected official.
The case worked its way through the courts and a series of appeals for years, ending last week when the county’s governing body approved a settlement agreement.
Where will funds come from?
Members of the Coffee County Budget and Finance Committee opted to fund roughly the half the amount owed by using settlement $447,878 the county’s unassigned fund balance and $114,622 from the State Unclaimed Property Refund.
“The unassigned fund balance is the money that’s set aside for emergencies,” said Marianna Edinger, director of accounts and budgets for Coffee County.
The remaining cost will be paid using $300,000 that was set aside for the case last fiscal year to prepare for the costs associated with this case.
The county’s insurance carrier will cover $120,000, which is more than county officials initially expected the coverage to pay, according to Edinger.
The funds coming from the State Unclaimed Property Refund, $114,622, previously couldn’t be spent by the county.
“Over the years, if you have checks that were [not cashed] over a period of time, that money had to be sent to the state – it’s called unclaimed property,” Edinger said. “They [the state] changed the law in 2016, and we can now apply to get that money back. So we got one big lump sum payment unexpectedly this year, and that money wasn’t budgeted for anything, which is good and bad.”
It’s good, according to Edinger, because the money could be used for the settlement and would lighten some of the financial burden, and it’s bad because these funds could have been used for other needs of the county.
After paying for the settlement, the revised estimated fund balance of the county will be about $2.2 million, “which is not bad,” according to Edinger.
Protecting the county
Throughout the litigation process, questions have been raised about insurance coverage, policies and procedures that need to be implemented to avoid such situations harming county employees, as well as the county, in the future.
Commissioner Lynn Sebourn, one of the 11 new commissioners elected this year and a member of the budget and finance committee, said he’ll work hard to review existing policies and implement necessary procedures with the goal to protect county taxpayers in the future.
According to Sebourn, by settling the case now, the county was able to reduce further damages.
“An additional appeal to the Tennessee Supreme Court was considered, but the chances of success were very low,” Sebourn said. “If the Supreme Court agreed to hear our appeal and we lost again, the additional legal fees and delays could have pushed the total damages up to $1.5 million.”
It’s not clear if taxes will be raised due to the high price associated with this case, according to Sebourn.
“We will not know the full impact of the settlement payment until we work through the budget process this spring,” Sebourn said. “It is my intention to avoid a tax increase, if at all possible.”
This lawsuit loss has been “a difficult pill to swallow,” he added.
“It is our responsibility as a commission to learn from this mistake and to make changes to reduce the chances of this happening again,” Sebourn said. “No one can promise we won’t ever lose a lawsuit again in the future, but I believe there are some clear actions we need to take.”
Ensuring the county has proper insurance to cover damages due to lost wages and benefits should be a priority, said Sebourn.
Reviewing the county’s personnel policies to make sure they address Tennessee Public Employee Political Freedom Act (PEPFA) violations is essential, he added. Keeling filed the lawsuit claiming the county had violated PEPFA by firing her.
Additionally, the training process should be improved, said Sebourn.
“We need to ensure our HR office is well trained to assist our county departments with handling employee complaints and treating everyone fairly when they are hired and when they leave employment,” Sebourn said.
The documentation process needs to be reviewed and improved, as well.
“If there are disciplinary issues with an employee, we need to make sure we properly document any actions taken to assist in any future legal actions,” Sebourn said.
Advocating for a change in PEPFA law would be helpful, the commissioner added.
“This law mandates triple damages, which is punitive whether the county deserves punitive damages or not,” Sebourn said. “The burden of these triple damages falls on you – the taxpayer – not the individuals responsible in the government.
“I believe the responsible approach is to get the settlement paid and work to improve our processes and laws to keep this from happening in the future.”
Elena Cawley can be reached by email at email@example.com.