Remove ImagesFox Threatens To Sue
June 07, 2012
Guilford County Manager Brenda Jones Fox is threatening to sue Guilford County if the Board of Commissioners votes to take away a $61,000 retirement bonus that was provided in an early retirement incentives enhancement plan the commissioners approved at their Thursday, March 1 meeting for employees who retire from Guilford County government between August 1, 2012 and Feb. 1, 2013.
On Wednesday, May 30, Fox's attorney, Seth Cohen of Smith, James, Rowlett & Cohen LLP, had a letter hand-delivered to Guilford County Attorney Mark Payne, informing Payne that, if the board votes to rescind the March 1 action that provides Fox the $61,000 retirement bonus, then Fox may sue the county.
Almost all of the commissioners say that the board only approved the plan in the first place because Fox hid it on the board's consent agenda – which is a long list of items, usually routine, non-controversial ones approved with no discussion by a single quick vote of the board.
Many commissioners who didn't read their agendas closely enough to catch the change in retirement bonuses have said they never would have voted to temporarily remove the bonus cap in the first place if they had known it was included as part of the consent agenda, and they have expressed a desire to revisit and perhaps rescind the motion at their next meeting on Thursday, June 7. Payne has informed the commissioners that they have a legal right to overturn the bonuses if they choose to do so.
Payne has conferred with the School of Government about the Board of Commissioners' right to rescind the vote that would allow Fox the $61,000 bonus on her way out. The School of Government is part of the University of North Carolina at Chapel Hill and is often consulted by local governments on laws and practices.
Payne argues that Guilford County and the 22 county employees who have stated they might use the plan haven't entered into a contract; he has said the actual contract would take place at a future date, and he has also said that, just as the Board of Commissioners has the right to change the terms that it approved at the March 1 meeting, all the employees affected have the ability to alter their plans accordingly. Payne said there's nothing forcing those employees to retire if they decide they don't like the conditions of any new plan that the board might approve at its June 7 meeting.
Cohen, who has represented Fox in various matters over the years, also represented former Guilford County Tax Director Jenks Crayton when he was accused of wrongdoing by commissioners about seven years ago. At that time, three separate investigations found that Crayton did nothing wrong.
Cohen states in his May 30 letter that it would be an infringement of Fox's rights if the board votes to rescind the temporary lifting of the cap that made Fox eligible for the $61,000 bonus – rather than a $16,500 retirement bonus she would have qualified for if the board hadn't done so.
Fox, 69, has worked for Guilford County government for almost 42 years, and the move that many commissioners say was hidden in the March 1 consent agenda only lifted the cap for 30-year-plus employees, such as Fox – and only applied to those employees who decided to retire at the same time that Fox is retiring. All of that led many to believe that Fox was secretly packing a golden parachute for herself with taxpayer funds.
A plan to encourage long-term – and generally high-paid – county employees to retire has been in place for about three years. However, that plan has always had a cap until the March 1 vote lifted it for the select group of employees for a short period of time. The county commissioners and the public found out about the cap on Thursday, May 10, after an article in The Rhinoceros Times revealed that Fox was in line to get the $61,000 bonus. It had previously been reported in the mainstream media that Fox's bonus would be limited to $16,500, but that was wrong.
The revelation that Fox would in fact be getting over $61,000 was followed by much outrage among citizens and commissioners – resulting in comments by various commissioners that the board might overturn the temporary removal of the cap.
Cohen's letter to Payne made it clear that Fox, and her legal representation, wouldn't take that move sitting down.
The letter begins: "Dear Mark, This firm represents Brenda Jones Fox. The purpose of this letter is to put the County on notice that if the Board of Commissioners rescinds its March 1, 2012 Voluntary Enhanced Retirement resolution ("VER"), Ms. Fox (and possibly other County employees) will seriously consider litigation against the County for breach of contract and violation of Art. 1, Sec. 10 of the United States Constitution.
"It is my understanding, based upon media reports, particularly the May 24, 2012 edition of The Rhinoceros Times, that you are of the opinion that the Board can legally rescind its earlier action with regard to the VER. You are quoted as saying that you do not believe there has been a formal offer and acceptance between the County and its employees; therefore, the Board could reverse its earlier action. You did, quite candidly, state that 'reasonable people could, I believe, come to a different interpretation of the legality of making a change.' Although I agree that reasonable people could come to a different interpretation, I strongly believe that there are binding executory contracts in place between Guilford County and those employees who have notified the County of their intent to retire prior to February 1, 2013, including Ms. Fox."
Cohen cites a 1959 NC Supreme Court case, Tillis v. Calvin Cotton Mills, in which, his letter states, the court found that, "Parties to an executory contract for the performance of some act or services in the future impliedly promise not to do anything to the prejudice of the other inconsistent with their contractual relations and, if one party to the contract renounces it, the other may treat renunciation as a breach and sue for his damages at once, …"
Cohen further states that an action by the Board of Commissioners that overturned the March 1 temporary removal of the cap would harm those 22 employees who have expressed an intent to retire during the window in which the cap would be suspended.
"Accordingly," Cohen's letter states, "these employees including Ms. Fox, could immediately sue for breach of contract."
Cohen further writes that there's a constitutional basis for his claim on Fox's behalf, citing Article 1, Section 10 of the US Constitution. That section, which contains the "contract clause," declares that states and local governments cannot pass laws that impair the obligations of contracts they have made.
Cohen also states that, in his view, if Guilford County is sued based on this ground then Fox and perhaps others who prevailed in a lawsuit would be entitled to recoup their attorneys' fees in addition to other costs and damages.
Cohen's letter states that he hopes legal action will not be necessary, but it goes on to say, "however, if the Board of Commissioners does decide to reverse its earlier vote on the VER, litigation certainly is an option."
Cohen's letter ends by instructing Payne to contact him if there are any questions, and Cohen also makes it clear that he wants the contents of the letter to reach the county commissioners.
Cohen writes: "I trust that you will share this letter with each of the Commissioners."
On Thursday, May 31, the day after Payne received the letter, Payne did pass it on to the 11 commissioners. Payne attached a note that said he had an out-of-town meeting that day and he could be reached on his cell phone if the commissioners had questions for him regarding the threat of a lawsuit.
They did have questions, and the commissioners were still calling Payne and asking details and implications this week.
Payne may have been willing to discuss the potential lawsuit with the county commissioners, however, when asked about the letter and some aspects of the situation by The Rhinoceros Times, Payne didn't have much to say.
When Payne was asked if Fox was the only one of the 22 county employees who had secured an attorney and sent a letter to Payne, he responded in an email that said simply, "I do not think I can respond to your inquiry."
At this point, however, there's no indication that anyone other than Fox has contacted the county and threatened legal action.
The purpose of the letter from Cohen was clearly to try to dissuade the board from taking action to overturn the bonus cap that it passed when it approved the consent agenda on March 1.
The consent agenda passed on a 7-to-3 vote, with Commissioners Billy Yow, Bill Bencini and Paul Gibson voting against it. Commissioner Mike Winstead was not at that meeting.
Yow, Bencini and Gibson commonly vote against the consent agenda for like reasons: As Yow put it recently, "With the consent agenda, you never know what you're really voting for."
Last month, Yow called what happened on March 1 a local version of "Nancy Pelosi politics" – citing a now famous quote by the US House minority leader two years ago in which she stated that the only way to learn what was in a piece of legislation was by passing it.
The three commissioners who voted against the consent agenda that night also happen to be three of Fox's most vocal critics. Fox has been at the center of scandal after scandal starting in the fall of 2010. When new scandals arose month after month, there was plenty of outcry from citizens but, for whatever reason, the votes were never there to fire her.
Yow said that, long before the current chorus of voices on the board that is now critical of the manager, he was publicly stating in open meetings that Fox needed to go.
"They didn't have the backbone," Yow said of the majority of the board at that time.
More and more, these days, however, the board is becoming disenchanted with Fox to say the very least.
Yow said that getting rid of Fox now is more complicated since the board didn't fire her in the face of a whole slew of very serious scandals in 2010 and 2011. Yow said that Fox supporters will ask, "Why now?" after all that's happened.
"They will say, well, you knew about all that and you didn't fire her," Yow said.
Of course, on the other hand, the latest scandal is just more fuel for the fire.
Gibson expressed utter surprise at the letter from Cohen and said he maintains the same position that he's had from the start of the controversy: If Fox wants to sue, then let her sue.
Winstead said that when he saw Cohen's letter, it really said something to him about Fox's character.
Winstead said he wasn't at the March 1 meeting, but he said, the board voted that night and passed something it didn't know it was voting on and now – now that the commissioners want to undo that and set things right – Fox is threatening a lawsuit.
He said it was totally beyond him what motivated Fox to call an attorney and have that letter sent.
Winstead said he wasn't worried about a lawsuit from Fox.
"People who say that they are going to sue you never do," Winstead said. "If people are going to sue you, then they just do it."
He said he didn't even read the entire letter because it was simply "silly."
He said that even if Fox does sue, the board still needs to do what is right.
"Unfortunately, people can sue you for anything," he added. "If she sues us, and she wins, then she wins."
He also said that the board should just do the right thing and let the fallout come as it may. Winstead said the threat of a lawsuit doesn't change his mind and it also shouldn't change the mind of other commissioners who wanted to see the cap back in place for 30-year-plus employees who decided to retire.
"In a case like this, we should do what is the right thing – and our attorney tells us that we have a legal right to do it," Winstead said.
Winstead said the board may have other options, such as demoting Fox from her county manager position, but keeping her on in some other capacity until she retires.
Commissioner Kirk Perkins also said he was very surprised by Fox's threat of a lawsuit, and, he added, he couldn't think of any reason for doing it. Perkins said it was a bad move politically as well as in other respects.
Commissioner Linda Shaw also said she found the threat by Fox to be very disturbing. She said she had been trying to reach Payne to ask some questions, but the lawsuit threatened by the manager certainly wouldn't cause her, Shaw, to back down.
"It doesn't change my mind one bit," Shaw said.
Gibson said he didn't want to see Fox get a dime of that bonus money, but he reiterated a sentiment he had stated before – that even if the board did end up paying $61,000 to get rid of Fox, it would be the best $61,000 Guilford County has ever spent.