Dawn Townley is reaching a settlement with the city of Hillsdale concerning a whistleblower lawsuit, after months of extensive negotiations, according to a document released before a city council meeting on Monday.
The document — specified as a status update — is not an official court disclosure, but John Lovinger, the city’s attorney, said at the city council meeting that it was meant to dispel doubts about the case’s progress.
Lovinger said negotiations have ended and that the litigation of Dawn Townley v. Hillsdale City Council, Hillsdale Board of Public Utilities, David Mackie, and Mike Barber has been resolved.
Townley refused previous settlement offers and insisted on taking the case to trial, which was held Sept. 8. Shortly after the trial, a settlement conference between City Manager David Mackie, his attorney Audrey Forbush, Townley, and her attorney Colin Nyeholt occurred on Sept. 25, according to the document. The status update indicates that the parties reached a settlement for $80,000, calling it an “economic decision” on the city’s part.
Lovinger said the settlement is not an indication of the city’s guilt. According to the document, Townley agreed to state the settlement was not an admission of guilt on the part of the defendants. The status update also said Townley agreed not to seek re-employment by either the City of Hillsdale or the BPU.
Neither Townley nor Barber could be reached for comment, and Mackie declined to comment.
Townley, previously employed by the BPU as a finance controller, filed suit against the city of Hillsdale and the BPU on Nov. 10 for allegedly violating state and federal whistleblower protection laws and committing Intentional Infliction of Emotional Distress, unlawful gender discrimination, and disability discrimination against her in violation of state and federal laws.
According to documents filed in the Western District Court of Michigan, Southern Division, Townley claimed shortly after being hired by the BPU, Mackie asked her to investigate suspicions that “former director Director Rick Rose and accountant Annette Kinney had been embezzling from the organization.”
While she investigated Rose and Kinney, Townley claimed she found evidence that the current BPU Director Mike Barber had also embezzled money from the city. She said Barber verbally bragged about using the city’s credit card to go to a restaurant with his family.
Townley claimed after her discovery, Barber began to “harass her in the workplace” with the intention of “pushing her out,” according to the plaintiff’s complaint.
Barber said he fired Townley because she was not performing her duty or completing the tasks her position required, according to a response filed by the defendants.
“The employment decisions made by defendants with regard to plaintiff were based on sound legitimate business judgement and based on the performance and misconduct by plaintiff,” the defendants said in the response.
Lovinger said although some of the BPU’s actions were found to be inappropriate, there was no evidence that Barber and his predecessors had committed large scale fraud by embezzling more than $7 million as Townley had claimed.
“The only evidence discovered related to the fraudulent use of a BPU credit card by prior administrative staff, but nothing involving any of the defendants in this case or any current employees,” the status update reads.
Lovinger said there was misuse of the BPU credit card by former administrative staff but that the exact amount still remains unknown. He said, at most, it cost the city $30,000.
This case will result in tighter control of the BPU’s operations, Lovinger said.
“In any negative situation, there is a lesson learned,” he said. “In the future, this will not happen, because the city will have more control.”