The opinion of the court was delivered by: Raye , P. J.
Thulin v. Gateway Unif. School Dist. CA3
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
There is no dispute that defendant Gateway Unified School District (District) denied the plaintiff whistle-blower an opportunity to appear before its governing board (Board) to explain her accusations of illegality and wrongdoing, threatened her with disciplinary action for insubordination, put her on administrative leave, required her to deal exclusively with its legal department, failed to give her notice the Board was meeting to consider her demotion from assistant superintendent to classroom teacher, and then demoted her in a closed session four months after she sent the Board a letter outlining her concerns. Nor is there any dispute that she had worked diligently for the District for approximately 15 years and never had been criticized for her job performance.*fn1 Indeed, she had received stellar reviews.
Plaintiff contends there is a material triable issue of fact whether the District's motive in marginalizing and demoting her was retaliatory. The difficult question posed by this appeal is ascertaining whose motive is determinative. The District insists the new superintendent recommended plaintiff's demotion to enable him to build his own leadership team, a team which would have been hampered by plaintiff's confrontational style. In the District's view, the Board deferred to the new superintendent's prerogative to choose his own team.
The District's simplistic defense masks the reality of its decision making during the relevant four-month period. We conclude that plaintiff offers sufficient evidence to raise a triable issue that the Board president, in conjunction with the old and new superintendent and others, engaged in a pattern of adverse employment actions in retaliation for the whistle-blowing. While she bears a heavy burden of proving her accusations at trial, plaintiff Jody Thulin has satisfied her burden in resisting a summary judgment. She deserves, therefore, a trial on the merits of her retaliation claim. We reverse.
The District does not suggest, and the record does not support, any notion that plaintiff was anything other than a hard working, conscientious, and loyal employee who, over a nearly 15-year career, was promoted from special education aide to classroom teacher to assistant principal to director of educational services and eventually to assistant superintendent/chief business official (CBO) for the District. Throughout most of this time, John Strohmayer was her advocate and mentor. As superintendent, in fact, he recruited her to become his CBO, the fifth in approximately three years. Strohmayer worked for the District for 33 years and was scheduled to retire at the end of June 2009. Plaintiff had no interest in becoming superintendent.
By her own admission, plaintiff "had no background in business and this move represented a tremendous learning curve for me." She enrolled in the USC School Business Managers program, where she not only completed valuable coursework but developed a "network of highly competent CBOs and other professionals that are currently working all across California school districts."
Plaintiff was to spend about a year as CBO before her long-term relationship with Strohmayer unraveled and she was sent back to the classroom. Before February 2009 Board President Kenneth Matias believed she had been a team player. The relevant story unfolded in a mere four months.
By early 2009 plaintiff believed Strohmayer, on behalf of the District, had engaged in improper bidding practices, the unlawful expenditures of bond funds, and various financial improprieties. She consulted with the professional network she had built through the USC School Business Managers program. She was advised to resign or to report her concerns to the Board. She chose the latter. She did not intend to make allegations or complaints against Strohmayer, and she "was not looking for him to be disciplined in any way." Rather, she explained, "I wanted the board to give me direction on how to handle it," "on how we could resolve the problem."
According to plaintiff, she confronted Strohmayer but was ignored. By February 5 she needed a stress-related medical leave. On February 11 she submitted a written memorandum describing her concerns in some depth to the superintendent and each of the seven members of the Board. She expressed her apprehension that the memo would reflect poorly on a superintendent with whom she had enjoyed a long-term friendship. But she believed she had "an ethical and legal obligation to this full Board of Trustees to report these issues to you." She wrote, "I fear that by coming forward with this information that I will now be the subject of negative attacks and retaliation and that my career here will be in jeopardy."
Plaintiff would have preferred to meet with the Board in closed session to provide all the information to all the Board members at the same time "so that everyone would hear the same information at the same time so that there could be no miscommunication, misunderstanding, or any question about my motives or my goals in disclosing this information." Ken Matias, the Board president, and Strohmayer, however, demanded to review the information in advance of any meeting, and when plaintiff, fearing censorship, refused to provide it, she was not allowed to make a presentation to the full Board. Strohmayer threatened plaintiff with disciplinary action for insubordination.
The merits of plaintiff's concerns are not at issue in this appeal. To provide context and an understanding of the investigation that followed, however, we will describe the essence of each of her concerns. The description that follows reflects her point of view as set forth in the written memorandum she ultimately sent to the Board.
No. 1. Plaintiff did not think the terms of a bond financing had been adequately presented to the Board or to the voters. The voters approved funding for building and renovation. According to plaintiff, the District over-expended funds from its 2002 general obligation bonds and therefore issued certificates of participation (COP) in 2006 and 2007. The 2007 COP, however, could not be prepaid, a fact she believed should have been presented to the Board and disclosed to the voters during the 2008 campaign. By electing the no-prepayment option, the District was able to borrow an additional $145,000 to $165,000. Plaintiff disagreed with the superintendent about how to handle the 2007 COP and the financial implications of not prepaying the bond.
No. 2. Plaintiff identified several instances in which she believed the District had a conflict of interest and had accepted campaign contributions in exchange for promises of work. A consulting firm agreed to help the District pass a school facility bond with a contingency fee-type agreement. The District would pay nothing if the bond measure lost, but if it was successful, the firm would serve as the District's financial advisor. Despite the agreement, the firm billed the District $13,000 for campaign services. Plaintiff refused to pay the invoices. She later discovered the same firm had mishandled campaign funds for other districts.
Nevertheless, according to plaintiff, Superintendent Strohmayer signed a separate contract with an organization that was a mere front for the consulting firm and agreed to pay the organization $10,000. Plaintiff, the treasurer of the bond campaign, was kept in the dark. Strohmayer and the consulting firm allegedly solicited campaign funds after the election even though the campaign no longer had any debts.
No. 3. Plaintiff also was concerned about violations of bidding laws. As one example, she claimed that the District unlawfully "piggybacked" on another district's bid without putting the purchase of a bus out to bid and without providing the other district all the information it needed at the time it issued its bid. Moreover, plaintiff asserts that the District paid almost $50,000 more for the bus than the amount listed in the other district's bid.
A second example involved a purchase order for winterization and erosion control. Strohmayer gave plaintiff the purchase order to pay, although the work already had been completed, and consequently, she could not follow Board policy to obtain preapproval. The invoice was in the amount of $275,550 even though the purchase order request was for $28,875. Plaintiff complains that because the amount of the invoice required the District to use the competitive bid process and that process had not been followed, she refused to pay the invoice.
A barrage of memos to the Board then followed. Strohmayer felt compelled to defend himself "from what I feel is an unwarranted attack from another employee, Chief Business Official (CBO), Jody Thulin." He contested the truth of her allegations, and a "he said/she said" battle ensued. Both sides wrote more explanatory memos.
Meanwhile, plaintiff repeatedly asked to appear before the Board. Politics and lawyers interceded. The District's lawyer recommended another lawyer in his law firm, Jeffrey Kuhn, to conduct an "independent" investigation of plaintiff's allegations. He ultimately issued a report to the Board. He, too, informed plaintiff she had a right to have complaints against her heard by the Board in open session. On a couple of occasions a meeting was scheduled and then canceled. By contrast, Strohmayer had an opportunity to present his defense to the Board in a closed session. At least two of the Board members, Anderson and Dale Wallace, expressed outrage to Matias and encouraged him to give plaintiff an opportunity to appear before the Board. Matias claimed he would not allow plaintiff to appear before the Board in deference to Strohmayer's due process rights.
Anderson thought it was unfair that Strohmayer could appear before the Board but plaintiff could not. He had several conversations with Matias and Alan Swanson, the District's general counsel, because he was concerned about the "legal ramifications for denying her access to the [B]oard." He reported that Matias was very frustrated with plaintiff and told Anderson that she was behaving like a petulant child. Stymied in his efforts to persuade Matias to allow plaintiff a meeting, Anderson advised plaintiff to get a lawyer because he felt she was being retaliated against and that people were trying to hide information. In his e-mail to plaintiff, he wrote: "So I gathered from that conversation that [Strohmayer, Matias, and Swanson] had spoken and found a way to call off the meeting off [sic] to not allow you to present."
Kuhn issued his report at the end of March. The District characterizes the report as a complete vindication of Strohmayer and a rebuke of plaintiff. It is true that Kuhn concluded plaintiff was naive about politics and doing business in a politically charged environment, but the report was hardly a scathing condemnation of plaintiff or the complete vindication of Strohmayer.
For example, Kuhn addresses the allegation of overspending with a notation that cost overruns are common and plaintiff's "limited experience with such projects" might have contributed to her "over-estimation of the amount of control that can be attained over them." But he also admonished the District as follows: "On the other hand, it is important that a district put in place appropriate project and budget management processes and human resources in order to avoid the avoidable cost overruns and the audit exceptions that can otherwise result from the lack of such processes and resources. This investigator believes that everyone concerned would agree that in the past the District has not always been able to put and keep in place such processes and resources, and that has contributed to cost overruns and audit exceptions on some facility construction projects."
The facts surrounding many of plaintiff's alleged improprieties were hotly disputed. Kuhn goes to great length to describe the different recollections each participant had of the key events. Again, we provide but one exemplar reflecting the factual dispute and the investigator's findings. "The inconsistent statements from Ms. Thulin, Superintendent Strohmayer, and Jon Isom concerning who first told whom about the structure of the 2007 COPs during the 2008 bond measure planning and campaign cannot be reconciled. What appears to be clear in hindsight, however, is that there is not a clear record showing that the information about the options actually available to Gateway for the structure of the 2007 COPs or the 2008 General Obligation Bonds was presented to the Governing Board in a meaningful way by the Superintendent, the then-Chief Business Officer, or the financing team. It is this investigator's opinion that such information should have been presented to the Governing Board, and the Governing Board should have then given direction to the staff and the underwriter for the financing as to the Governing Board's preferred structure, and this decision making should have been documented in Gateway's records. The issue here is not whether the substantive decision to structure the 2007 COPs without a prepayment option, or to structure the 2008 General Obligation Bonds as a 'tax rate extension' measure were prudent or imprudent decisions; but, rather, whether the process for making those decisions was the most appropriate, transparent, and properly documented under the circumstances."
Nevertheless, it is also true that Kuhn concluded the District had not violated any bidding laws, its consultant during the 2008 campaign did nothing inappropriate, Strohmayer was not to blame for the departure of the four prior CBOs, and plaintiff acted well beyond her authority in hiring advisors to assist with the 2008 general bonds. Plaintiff was not satisfied with Kuhn's conclusions and recommendations, and requested an investigation by the grand jury and the Fiscal Crisis and ...