Greenwood officials deny mailer’s ‘hush money’ allegations

Greenwood officials are pushing back against a political mailer accusing the city’s mayor of paying “hush money” to settle lawsuits filed by former city employees.

The mailer sent by Friends of Joe Hubbard alleges that incumbent Mayor Mark Myers, who is seeking reelection, spent “tens of thousands” of taxpayer dollars on legal settlements. It further claims he is trying to “cover up” civil suits by former city employees and a former employee of Indy Greenwood South Airport. The mailer cites three lawsuits filed in the U.S. District Court for the Southern District of Indiana are cited in the mailer, along with a settlement agreement that was filed in the city clerk’s office.

However, city officials say the mailer is misleading because no “hush money” has been paid to anyone. While all four items listed on the mailer involved settlements, which are not the same thing as “hush money,” said Sam Hodson, an attorney with Taft Stettinius & Hollister LLP, who represents the city on occasion.

“They’re being misconstrued to look like the city is paying hush money when we clearly are not. It’s a normal process,” Hodson said.

None of the suits filed mention Myers by name or that he’s personally involved, according to copies of the complaints of obtained by the Daily Journal via PACER, the U.S. Government’s federal court records access service. The mailer repeatedly asserts that the settlements are the result of Myers’ “failed leadership.”

In the first suit, filed in November 2015, a former female police officer accused the Greenwood Police Department of wrongful termination. The officer also alleged former Police Chief John Laut was responsible for or knew of discrimination and targeting against her, according to a copy of the complaint.

The second suit, filed in March 2021, involves a former female employee who accused the city of age discrimination. The employee alleged another city employee made “threatening remarks” about her employment, and that city terminated her employment and hired a “substantially younger” individual to replace her, the complaint says.

A third complaint by another former female employee, initially filed in February 2022 but amended the next month, accused the city, and specifically the Parks & Recreation Department, of age discrimination, gender discrimination and retaliation. The employee referenced a report she made about a supervisor who made “pervasive inappropriate sexual comments” and harassment in and around January 2018.

The complaint shows that the parks department implemented e-learning segments regarding sexual harassment following the employee’s report. However, the employee alleged the supervisor micromanaged and gave unwanted discipline to them in the aftermath. Eventually, the employee was terminated for “alleged performance issues.”

The employee went on to allege that no “similarly situated” employees were treated in the same manner and that they were replaced by a “significantly younger” individual, the complaint shows.

While sexual comments were mentioned in the complaint, the employee did not list sexual harassment as one of her legal complaints, the filing shows.

Having an employee take harassment training is a normal procedure following a situation like this, he said. Hodson emphasized that there was no physical touching involved in the incident reported in the complaint.

“The (employee) admitted that the city took remedial steps following her complaint and made her supervisor take harassment training,” he said.

The other referenced legal agreement on the mailer is a February 2018 settlement agreement, for which a civil complaint was not filed, Hodson said.

The agreement involves a former Indy South Greenwood Airport manager who notified the city about potential claims involving her employment and termination, according to a redacted copy of the agreement provided to the Daily Journal. The woman’s name was the only item redacted.

As part of the settlement, the city agreed to pay $7,500 to the woman. She received severance as part of the settlement, an amount equal to less than two paychecks for the position, Hodson said.

Two week’s pay and benefits for the position is calculated by using the position’s pay, along with insurance, FICA/Medicare and PERF rates. The total pay per pay period was $4,009.32 in 2018, Hodson said, citing numbers from the city controller.

The $7,500 settlement is equal to roughly 1.9 pay periods.

The agreement does not list any specific allegations, though Hodson says the situation did not involve misconduct. There is a non-disclosure agreement, or NDA, however.

Under the NDA clauses, both the woman and the city were prohibited from disparaging, demeaning or communicating any information that was “damaging or potentially damaging” information to either party, their business or reputations with or to the media, business associates, customers and vendors of the other party. This includes communicating damaging information about public officials, the agreement says.

Having an employee sign a non-disclosure agreement is common practice in situations like this, Hodson said.

“You’ll never find an employer paying a severance not requiring an employee to sign an NDA,” he said.

It’s also common for former employees to make allegations after they are fired, and for employers to pay “small nuisance settlements” to avoid the expense of litigation, he said.

Whenever the city is sued, the insurance carrier hires a lawyer to work on the suit. The city’s policy, like most others, allows the carrier to settle without the insured’s consent, Hodson said.

In terms of payments, after the insurance deductible is reached, the settlements are paid by the carrier, he said.

The settlement for the airport employee was handled by Sergey Grechukhin, a former city of Greenwood attorney. The $7,500 severance was paid directly by the city, Hodson said.

It’s not uncommon for taxpayer-funded public entities, like cities and schools, to reach settlements with former employees who make allegations and file lawsuits against them as employers. For example, in 2016, Franklin Community School Corp. agreed to give $35,000 to a former administrator to settle a discrimination complaint she filed against the school district after she was fired.

All of the settlements were approved by city boards, Hodson said. For the civil complaints from federal court, the settlements were approved by the city’s Board of Public Works and Safety. For the airport employee’s settlement, the city’s Board of Aviation Commissioners was the approving body, he said.

Hubbard’s campaign stands by the statements made in the mailer.

“Mark Myers and his cronies want voters to believe it is ‘normal’ for taxpayer dollars to be used in non-disclosure agreements that involve money exchanged for people’s silence It’s scandals like this that show it’s time to change how the mayor does business in Greenwood. Myers’ leadership has led to increased crime rates, rising taxes and questionable legal settlements,” a statement from the campaign says. “Greenwood deserves leadership they can trust and that will operate with complete transparency.”

CLARIFICATION: April 27, 2023 at 1:30 p.m.

A previous version of this story said, citing a city official, that the former Indy South Greenwood Manager who signed a settlement agreement with the city received severance equal to two weeks pay. This was incorrect, and the actual settlement amount was equal to less than two paychecks. The story has been updated with this information and additional information.