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Story Last modified at 9:59 a.m. on Thursday, March 17, 2011

Jury tells MEA to pay
Co-op can't recoup settlement from former manager

BY ZAZ HOLLANDER
Alaska Star

A Palmer Superior Court jury rejected Matanuska Electric Association's bid to hold a former manager liable for hefty settlements paid to a pair of MEA officials he was ordered to fire in 2009.

MEA officials said this week they don't plan to appeal the March 4 verdict. After a two-week trial, the jury ruled against the co-op's attempt to go after former general manager Wayne Carmony for the $650,000 settlement.

General manager Joe Griffith said Monday that MEA won't be raising rates to cover the cost of the settlements.

The money was paid in two installments in December and January to former assistant general manager Tuckerman Babcock and former IT director Bruce Scott in an out-of-court settlement of lawsuits filed against MEA by both men to recover severance they were never paid.

Griffith said this week he wasn't surprised by the verdict.

"It was a big company 'picking on' ... what appears to the jury to be a small guy even though he was dealing with big numbers and it caused big problems," he said.

Carmony's attorney, James Gorski, did not respond to calls for comment. It's unclear whether Carmony will file a lawsuit of his own to recover unpaid compensation.

The MEA board changed composition several years ago, shifting from a majority that backed the utility's longtime managers to one that took a more adversarial role.

The board in April 2009 ordered Carmony to fire Babcock and Scott "without cause" and then fired Carmony in June of that same year. Board members at the time remained mum about their rationale.

Babcock and Scott's contracts stated that if someone besides Carmony fired them without cause, the utility had to pay them for the remainder of their contract term, according to news reports at the time. Their two-year contracts had been renewed just weeks before they were fired.

MEA argued that Carmony's contracts were not legal because he never got board permission. Carmony argued the contracts were necessary to protect the managers from the board.

Former board member Aaron Downing, a Palmer resident, sat on the board when Carmony's contract was negotiated and approved.

Downing said the board enacted a vendetta against Carmony and that contracts "with strong teeth" were essential to protect managers from the politics that surface on boards.

"One ... basis of the contract was to offer an economic blanket of protection to a manager when faced by a rogue board of directors," Downing said in an e-mail. "The present situation is exactly the scenario anticipated by the contract."

He called the quick jury verdict – it took a few hours – a vindication for Carmony.

Griffith said it was more an indication of human nature.

Deliberations began around noon on a Friday, he said. "They (the jury) already had two weeks of it and they were tired. I worried a lot about that, that they would not like to come back Monday morning and do it some more."

As of April 1, Griffith said, he will be the only contract employee at MEA. Griffith's employment agreement is available at http://www.mea.coop/images/stories/griffith_contract.pdf



This article published in The Alaska Star on Thursday, March 17, 2011.