Fired city manager wins case against Henderson

Henderson could end up paying more than $1 million to a former city manager who sued after she was fired in 2009.

An arbitrator has ruled against the city in a breach-of-contract claim brought by Mary Kay Peck, who spent 18 months as Henderson's first female city manager before being dismissed with cause by the City Council.

In his interim order, arbitrator Gerald McKay ruled that city officials failed to prove they had sufficient cause to fire Peck from the $225,000-a-year job. McKay gave the city 30 days to negotiate damages with Peck's attorney, Norman Kirshman, who is predicting an award "in excess of a million dollars."

Kirshman said the arbitrator offered his own estimate of $1.3 million to $1.4 million, a figure that includes all wages, benefits, raises and the interest Peck would have earned had her contract been extended through October 2011.

City spokesman Bud Cranor wouldn't speculate about Peck's potential windfall.

"Both sides have to meet and discuss the numbers. We'll see what happens," he said.

McKay wrote that the city's contract with Peck made it clear she could be fired "for any reason or for no reason," but if she were to be fired without cause, as defined by the contract, she would be entitled to compensation.

Peck was seeking more than $2 million in damages.

Kirshman said his client received no formal severance package from the city. She walked away with about $160,000 in accrued sick leave, health benefits and pension payments.

The city hired Peck as its zoning administrator in 1995. She went on to become director of community development before being named city manager in October 2007.

Her tenure came to an end on April 14, 2009, when City Council members voted to fire her for "intentional and continuing failure to perform the job."

Council members accused her of withholding vital information from them and creating a "culture of fear" at City Hall.

Kirshman said Peck received no formal performance reviews during her time as manager or anything in writing that found fault with how she was doing her job.

In late March 2009, she was ordered to go on vacation, then was fired a few weeks later at a public meeting without being given the chance to defend herself, he said.

"She took a beating. She took an emotional beating," said Kirshman, who was with Peck at the council meeting in 2009. "It was like 'The Crucible.' You ever see that play? They were slowly burning her at the stake."

A month after she was fired, Peck sued the City Council in federal court, but the lawsuit was dismissed.

Peck also filed a grievance with the city over her termination, triggering the arbitration.

In the wake of her complaints about not receiving formal evaluations, the City Council resumed the practice of conducting regular reviews of its top three administrators for the first time since 2002.

Henderson officials also have changed employment contracts with the city manager and attorney, both of whom are appointed and supervised by the five-member City Council. The city clerk is appointed by the council but is not under contract.

Peck would not comment about the arbitrator's ruling, referring all questions to Kirshman.

He said his client is now living in Florida, but thanks to Google and other Internet search engines, what happened to her in Henderson continues to haunt her.

"Her reputation was irreparably damaged, but we're going to do everything we can to let the world know she's been completely vindicated," he said. "All their accusations were completely disproved."

Former City Councilman Jack Clark was among those who voted to fire Peck in 2009. Term limits forced him from office a few months later, but he said he has no regrets about what he did.

"My obligation was to protect the interests of the city, and I think we did that," Clark said of the decision to oust Peck. "The arbitrator decided she should get money for not doing her job. I disagree. But it is what it is."

Cranor used the same expression when asked about McKay's ruling.

"When we went to arbitration, we knew we'd be bound by whatever the arbitrator decided," the city spokesman said. "It is what it is."

Contact reporter Henry Brean at hbrean@reviewjournal.com or 702-383-0350.