Former Colton City Manager Stephen Compton will be allowed to proceed with his lawsuit against the city for wrongful termination and violations of California’s Open Public Meeting Law, a Superior Court judge has ruled.
The city of Colton, through its attorney, Elizabeth Han, had attempted to have the case thrown out entirely, claiming that the terms of Compton’s employment contract allowed him to be cashiered for any reason or no reason at all and under any terms the council deemed appropriate.
Han, who is with the law firm of Best, Best & Krieger, with which the city of Colton has a contract for municipal attorney services, sought to have Compton’s lawsuit terminated though the filing of demurrers to all three causes of action in Compton’s suit. A demurrer is an assertion by a defendant that although the facts alleged by the plaintiff in a complaint may be true, they do not entitle the plaintiff to prevail in the lawsuit in that there is insufficient legal backing for the claim.
On September 3, however, Judge David Cohn denied the demurrer motions across the board, clearing the way for the matter to go to trial.
Compton went to work for Colton in March of 2013 after holding over a period of 32 years varying finance and administrative positions with Ridgecrest, Fountain Valley, Indio, Soledad and Omnitrans in California and the city of Richland Center and the village of Sturtevant in Wisconsin and the city of Greenville in Texas. During the latter part of his first year at Colton’s helm, he came across a number of operational and accounting anomalies in the city’s public works division and capital projects. He utilized his authority as city manager, under which he could enter into contracts of up to $25,000 without first obtaining city council approval, to initiate reviews of the public works department and the city’s capital works operations and funding.
That proved to be a political faux pas on Compton’s part. Colton’s public works director, Amer Jakher, was held in high esteem by the city’s then-mayor, Sarah Zamora, the widow of the mayor who preceded her, David Zamora. Before he was elected mayor in 2010 and died in 2011, David Zamora had been Colton community development director and had a close friendship with Jakher. Following her husband’s death, Sarah Zamora was chosen as his replacement by a city council that was stunned by David Zamora’s untimely demise. In office, Sarah Zamora proved both reluctant and incapable of reining in Jakher or holding him to account, even as his department undertook projects that had not been given previous approval by the city council. Zamora’s attitude was emulated by most of the remainder of the council.
Moreover, among the issues explored in Compton’s reviews were what appear to have been unauthorized expenditures of funds on projects which benefited property owned by at least two then-council members, councilman Frank Gonzales and councilwoman Susan Oliva. This situation, however, was secondary to indications that there had been multiple unauthorized diversions of reserve funds to cover cost overruns on public works and capital improvement projects.
Alarm among some of the council’s members over the information Compton had procured triggered several closed session evaluations of Compton’s performance by the city council in the spring of 2014. After three such discussions in April and May, the council again met on June 3, 2014 to discuss and evaluate Compton’s performance in secret. As before, the council emerged from the June 3 meeting to have the city attorney report that it had taken no reportable action. But toward the close of the business day on June 5, Compton was confronted in his office and told he was being put on administrative leave and was then ignominiously escorted out of City Hall by a plainclothes policeman.
Compton remained on administrative leave for more than two months while an investigation into Compton’s action by then-city attorney Christina Talley and another attorney, Ontario-based Kathy M. Gandara, was ongoing. In the meantime, rumors and unsubstantiated reports abounded that Compton was to be terminated for exceeding his spending authority in carrying out the review of the public works department and the managerial decisions of public works director Amer Jakher.
Three members of the council – Gonzales, Oliva and Mayor Sarah Zamora – pushed to have Compton terminated with cause. On August 4, Gandara gave the city council an oral briefing of her findings, which showed that Compton had expended roughly $48,000 on various different outside work orders for consulting services including the review of the public works department, some $23,000 more than his $25,000 independent expenditure limit.
Gandara’s public report, however, was selective in its presentation and did not clearly delineate that the $48,000 worth of expenditures entailed a multitude of work orders, none of which exceeded Compton’s authority to engage in individual expenditures up to $25,000 each. No action with regard to Compton’s status was taken on August 4.
Ultimately and abruptly, on August 21, the city council terminated Compton, but cited no cause in doing so, thereby conferring on him the payment of four month’s salary as part of the severance clause in his employment agreement. At least four of the council’s members – Gonzales, Oliva, Zamora and councilman Isaac Suchil – were firmly in favor of the termination.
On October 9, 2014, attorney Cory Briggs filed on Compton’s behalf a writ of mandate combined with a verified complaint for declaratory and injunctive relief. Ultimately, that action was followed up with a lawsuit filed on May 18, 2015, alleging wrongful termination.
In his legal action on behalf of Compton, Briggs asserted, “On 8-21-14, on the advice of Colton’s city attorney [Christina Talley], the city of Colton and the Colton mayor and city council wrongfully terminated plaintiff in breach of his employment agreement and in retaliation for his reports to them of unlawful activities, including misappropriation of public funds by elected city officials, overstated account balances, improper use of the general fund to balance excessive spending by public works, and after he informed them that he needed to conduct an investigation on those matters.”
The lawsuit revolves around what Briggs maintains are violations of the Ralph M. Brown Act, California’s open meeting law, which he asserts was disobeyed when the council met to discuss Compton’s performance on June 3, at which time it took a vote which ended in a 4 to 3 decision to suspend him. The Brown Act requires that any vote on action taken during a closed session be disclosed at once. The council, however, allowed the city attorney to report that “no reportable action” had been taken.
Compton alleges the city refused to hold a public hearing at which the charges against him and the grounds for his termination were disclosed, as he requested and which request must be honored by the council, as required under state law.
In their demurrer on behalf of the city, Han and Best Best & Krieger maintain that the city’s sacking of Compton was entirely permissible in that under the terms of his contract he was serving at the pleasure of the city council, which at all times had the contractual right to terminate him with or without cause. The city also asserts it did not violate the Brown Act and in any event was not bound by the Brown Act in utilizing its right, specified in Compton’s contract, to fire him at will, as his contract said it could. No reportable action took place during the June 3 meeting, Han said.
Of moment, according to Best Best & Krieger is that Compton did not inform the city council of the investigation into Jackher but that he complains that he was retaliated against for having initiated an investigation. But since he did not inform the city council as a whole of the investigation, according to Best Best & Krieger, he has acknowledged that there was no retaliation. In fact, according to Best Best & Krieger, it was his duty to bring problems he encountered while running the city to the attention of the city council and doing his duty did not make him a whistleblower.
The city could have fired Compton with or without cause, according to Best Best & Krieger, and the intent of the language in his contract was that his employment with the city could be terminated without holding an open public hearing. Since there did not have to be just cause for his termination, there was nothing to prove and there was no need to have a public session at which the reasons for the termination would be explicated, the city maintains.
Judge Cohn pointed out, however, that there was evidence of a closed session agenda item that used the language dismissal and discipline in reference to Compton.
Cohn said that Compton is alleging a breach of contract and good faith and fair dealing. According to the judge, Compton’s employment contract says in section 9.1 that Compton’s employment is at will and section 9.2 says the council may remove the manager for cause by a majority vote or may remove the city manager by a unanimous vote of all members of the council.
Cohn said the problem is that the city’s reasoning for holding a closed session vote ignores California Government Code Section 54957. “State law trumps a local ordinance because it is the government code,” Cohn said. “A local ordinance cannot contravene state statute.”
Nor is it clear that Compton was fired by a unanimous vote of the council since the vote was taken in closed session.
Cohn then began to analyze the cited city ordinance and state government code section.
“Subsection 5 of Section 54957 is what we are concerned with,” Cohn said, “It says that essentially, the city can hold closed sessions to do a variety of things which include dismissal of a public employee and which include hearing complaints or charges brought by another employee, unless the employee requests a public session. The question is that last clause. Does it not modify everything that the city can do? It would be clearer if the legislature had put the phrase at the beginning of the statute.”
Cohn said that he interprets it as applying to the entire section, meaning Compton had the right to demand an open hearing. .
“The other thing,” Cohn said, “is that as a practical matter, somebody had to make some complaint or charge against Mr. Compton because otherwise they shouldn’t have had to consider his dismissal. Someone had to make a charge. The council does not say, hey, let’s put on the agenda an item sacking Mr. Compton. Government Code Section 54957 probably applies here. If it does apply, then the council didn’t give Mr. Compton the necessary notice. Guess what: He is still an employee, because the council action in closed session is null and void. There are some damages that come from it. If you prevail on the Brown Act, the dismissal is null and void.”
In effect, if that is the case, Compton will be due back wages until the present.
At this point, Sarah Zamora is no longer mayor, Gonzales and Oliva are no longer on the city council, and Talley is no longer city attorney.
Briggs pointed out that an element of Compton’s suit is a whistleblower action in which it is alleged he was retaliated against because he had uncovered wrongdoing by city officials. One way in which Best Best & Krieger had attempted to convince the judge to grant the demurrer was to argue that Compton could not be considered to be a whistleblower because he had reported wrongdoing to those he thought were the wrongdoers. The whistleblower law requires that that one report to someone with authority over the wrongdoers, i.e., someone who can do something about it. Briggs said that Best Best & Krieger has assumed that the wrongful acts were perpetrated by members of the city council. “We don’t even say that the actual wrongdoers are on the city council,” Briggs said. “We used the word implicated. It does not say that the council are the ones that are fleecing the taxpayers. Anyone that might be implicated are any of those who the investigative report was about, not necessarily the council members who were reported to. This is an appropriate subject for discovery and judgment, but not for demurrer.”
Cohn then issued a tentative ruling overruling the demurrer as to the first, second and third causes of action. He gave both parties 15 days to answer.