05-0484R


RESOLUTION APPROVING SETTLEMENT OF CLAIMS OF TAMMY OLSON IN THE AMOUNT OF $500,000.

BY COUNCILOR JOHNSON:

     BE IT RESOLVED, that the proper city officials are authorized to execute documents and to do the acts necessary to settle the discrimination claims of former city employee, Tammy Olson, under the following terms and conditions:

     1.   A full, final, and complete settlement, including release of all claims, which is enforceable by the court. (A motion to enforce a settlement agreement is currently scheduled to be heard on July 8, 2005);

     2.   Required district court approval is secured;

     3.   City will pay Olson the amount of $64,000 on or before the 30th day following district court approval of this settlement;

     4.   City will pay the sum of $250,000 into a structured settlement via a nonqualified assignment and release through NABCO, or other agreed upon vendor, to fund an annuity on or before the 30th day following district court approval of this settlement;

     5.   City will pay Olson’s attorney the amount of $144,000 on or before January 31, 2006.

     6.   City will pay Olson the amount of $42,000 on or before January 31, 2006;

     7.   Olson agrees to never apply for or seek employment or contract work with the city.

Payment will be made from Self Insurance Fund 610, Agency 036, Organization 1651, Object 5841.


STATEMENT OF PURPOSE:  This claim arises out of Olson’s employment with the city. She claims retaliation, disability discrimination, and hostile work environment under the Minnesota Human Rights Act. Olson worked in the purchasing department under the supervision of Claudie Washington. She claims that she was retaliated against and subject to a hostile work environment when she associated with Mr. Washington and objected to racial comments in the workplace. She was terminated after failing to report to work as directed. Her treating physicians will testify that the work environment was toxic and caused anxiety and depression.


The city’s potential liability is based upon the legal principle that an employer has a duty to take prompt remedial action to correct harassing and hostile behavior.


In this case, Olson alleges that she complained on numerous occasions of the hostile, harassing, and retaliatory behavior of her coworkers, and that despite her complaints, the behavior continued. She further alleges that the work environment caused anxiety and depression and that she was wrongfully terminated from her employment due to her medical condition. After her termination, her position was eliminated. Olson grieved her termination under the labor agreement, and the arbitrator sustained her grievance and ordered her reinstated. She subsequently applied for a provisional buyer position in the spring of 2002 and was not hired. Olson claims that all of the city’s actions are a continuing pattern of retaliation and discrimination.


The city denied these allegations and contended that Olson’s complaints were investigated and found unsubstantiated. The city further contended that Olson rejected its offers of re-employment, much of Olson’s allegations were not legally sufficient to establish a case, and her claims were barred by the statute of limitations. The court denied the city’s legal defenses and ordered a court trial, holding that sufficient disputes of fact existed to cause this matter to proceed to trial. The court further held that the arbitrator’s decision was binding upon the city, and the city was precluded from arguing that it had a legitimate business reason for terminating Olson’s employment based upon its sick leave policies.


The civil division of the city attorney’s office has investigated this claim and evaluated the potential outcome based upon the various damages allowable to plaintiffs under the law and the evidence in this case. It has analyzed the city’s loss exposure. The parties participated in mediation. The paid mediator indicated that the city’s potential exposure is substantially more than the amount of the settlement. Olson is seeking damages in excess of Two Million Dollars. Extensive settlement negotiations were conducted, and an agreement has been reached as set forth above. The city attorney’s office recommends this settlement.

 

DISCLAIMER