At the March 17, city council meeting, City Attorney Quinn Barrow announced that the council had unanimously approved a separation agreement with the city’s director of human resources, Cathy Hanson, in a closed session.
The agreement, signed by Hanson on Feb. 27, gave her six months’ pay, benefits, unused vacation time and retirement contributions totaling around $115,000.
In return, Hanson agreed not to file any lawsuits or seek employment with the city in the future.
Unlike with the retirement of former Community Development Director Richard Thompson in November, there was no public farewell ceremony for Hanson, who had been with the city since August 2007.
Documents released by the city under a public records request indicate that the city put Hanson on administrative leave, though they don’t specify when. On January 19, a lawyer, R. Craig Scott, contacted the city attorney to say he wanted to represent Hanson. Because his firm conducted an investigation on behalf of the city in 2003, it needed the city’s permission to represent her under the state bar’s rules.
The announcement of the separation agreement caught the attention of Manhattan Beach resident Edward Caprielian, who is a lecturer in public policy and administration at California State University, Long Beach.
“The total situation strongly suggests that, despite the language in the agreement, this employee’s departure was not voluntary,” wrote Caprielian in an email to the Easy Reader.
“In retaliation, it appears Ms. Hanson employed an attorney to initiate a lawsuit against the City,” he continued. “Apparently, the City replied with the ‘Separation Agreement’ to avoid litigation even though she was an at-will employee. This, in turn, suggests the City lacked the confidence it could prevail in the lawsuit.”
At-will employees can be fired any time without cause.
City Manager Mark Danaj provided a statement in response to questions from the Easy Reader:
“As a human resources management best practice in both the public and private sectors, the City does not publicly discuss personnel issues,” he wrote. “Further, structured separation agreements are also a common best practice for executive level managers in both the public and private sectors. Indeed, providing severance to executive level managers based on longevity is likewise a common best practice, and the City may be considering formalizing a structured severance program for its executive management team in the near future,” he said.
The city followed all appropriate laws with announcing the agreement, he said.
“The agreement speaks for itself, including the public value of the former employee waiving all rights to sue the City,” he added.
Hanson’s attorney, R. Scott Ridley, didn’t return calls for comment.
As of May 22, Hanson’s LinkedIn profile still listed her as the director of human resources at the city of Manhattan Beach.
Two lawyers specializing in employment law said it was not out of the ordinary for an employer to sign a separation agreement with an at-will employee.
California attorney Jeffrey Easley wrote in an email that this might be “to not only help the employee transition but to avoid the workplace disruption of litigation, the expenditure of substantial legal time and fees, and the possible finding of liability resulting in a damage judgment.”
Santa Monica attorney Roxanne Davis called the six months’ pay “on the generous side,” but “not out of reality.”
“A lot of times, the person in human resources knows all the skeletons in the closet,” she said.
She couldn’t deduce why Hanson left from the agreement, she said.
“Presumably Ms. Hanson had a lawyer present facts which could potentially give rise to legal claims against the City, and the City knew that fighting those claims might cost more than they could settle her claims for, considering the likelihood of prevailing as well,” she wrote in an email.
Captain Derrick Abell from the city’s police department has been serving as the interim director of human resources since Hanson’s departure.
Danaj said the city was actively looking for a new human resources director, and anticipated hiring someone in late summer. ER
