A Fayette Circuit Court judge has thrown out much of the $927,491 awarded last year by an arbitration panel to Kathleen Imhoff, the Lexington Public Library's former CEO, although the case is now pending before the Kentucky Court of Appeals.
Imhoff sued the library in 2010 for more than $5 million in damages. She alleged that she was dismissed a year earlier in violation of her employment contract; that she was publicly defamed by the library board chairman; and that she was discriminated against because she is a woman.
Judge Thomas Clark dismissed Imhoff's second and third claims but referred the first to a three-member arbitration panel.
In May 2013, the arbitrators ruled 2 to 1 that the library must pay Imhoff $927,491 because it fired her without citing a cause. They awarded Imhoff salary and benefits for the remaining two years of her contract at $446,129, plus damages, interest and fees totaling $481,362.
However, Clark ruled in February that the arbitrators erred or exceeded their authority on several points. Clark limited Imhoff to $256,940 for unpaid salary for the remaining two years of her contract, ruling that "the broad implication" under the contract is that Imhoff must be paid unless the library cited a reason when it dismissed her.
Both Imhoff and the library's board of trustees have appealed to the Court of Appeals in Frankfort.
"Our contention has been, as it's always been, that the contract allowed for either party to terminate the contract with 30 days' notice. There was no mention in the contract for what was due beyond that," said Larry Smith, the library board chairman.
Nearly all of the library's legal costs so far have been paid by its insurance company, Smith said.
Imhoff's attorney, Richard Getty, said he's confident that the court of appeals will reverse Clark's decision in his client's favor, although that could take as long as two years. Much of Clark's reasoning assumes that the library enjoys legal protection under the concept of sovereign immunity, but the library waived that with its employment contract, Getty said.
"What's really deplorable about this situation is that this woman entered a contract with them. All she asked for at the outset was, 'Pay me what's due under the contract,'" Getty said. "Instead, they've enriched the lawyers with God knows how much money over five years now."
The library board dismissed Imhoff in 2009 after the Herald-Leader detailed more than $134,000 she spent on travel, meals, gifts and other items over five years. A city audit later raised more questions about library spending and reported that 1,522 images of "adult materials" were found on a library computer assigned to Imhoff, in violation of library policy.
Imhoff defended her spending as proper and denied viewing adult images on the computer. Imhoff said she took the computer home with her for work duties, and someone else evidently used it to view the images without her knowledge. She also said her office at work had been broken into on three occasions, allowing someone to tamper with her computer.