In whistleblower suit, ousted Fayette schools CFO alleges retaliation by district

A Fayette public schools chief financial officer whose contract was not renewed has filed a lawsuit against the district claiming he faced retaliation after he questioned a top official’s raise.

John White on Aug. 4 filed a lawsuit in Fayette Circuit Court saying former Acting Superintendent Marlene Helm didn’t renew his contract in May after he questioned an abrupt pay raise that amounted to a nearly $17,000 increase in annual salary for General Counsel Shelley Chatfield.

White is asking for damages and back pay.

Helm headed the district from late 2020, when Superintendent Manny Caulk became ill and died, until June, when new Superintendent Demetrus Liggins was hired.

The Herald-Leader reported in June that White’s contract was not renewed. Helm cited, among other issues, White’s failure to inform her about “projected significant budget shortfalls”.

Helm also told White in an email that he remained eligible for rehire and encouraged him “to apply for any vacancies of interest with Fayette County Public Schools as they become available.”

The lawsuit alleged White was subjected to reprisal for bringing to the attention of the district administration “mismanagement, waste, fraud, or abuse of authority relating to the Chatfield pay increase.”

“John seeks vindication where he was penalized for properly carrying out his duties as Chief Financial Officer investigating and bringing to light the implementation of a mid-year salary raise done without his knowledge,” Michael J. Cox, White’s attorney, told the Herald-Leader Tuesday.

“Adherence to proper process and transparency should not cost someone his job, especially a CFO with respect to monetary expenditures, and the law provides remedies here. Fortunately the parties are now endeavoring to resolve the claims in hopes of avoiding litigation,” Cox said.

In response, school district spokeswoman Lisa Deffendall, said Tuesday night, “It is our practice not to comment on pending litigation and to instead focus on participating fully in the judicial process.”

White was chief financial officer from August 2017 until June 30, 2021, the lawsuit said.

In the Fayette County Public Schools, an employee’s annual salary typically starts with an annual base salary and is increased through established pay schedules, the lawsuit said. Various other mechanisms allow for pay increases, but the one at issue in the lawsuit is known as the “Hay Additive,” which is applied to administrative personnel.

The school board approves budgets that provide funding for salaries, but White learned during his tenure that the superintendent - whoever that might have been - has occasionally approved salary increases for some people through a process of requests for pay grade promotions on the Hay Additive schedule, the lawsuit said.

The lawsuit said there have been for years documented concerns about administrative and management salary increases outpacing other Fayette school employees such as teachers. There have been concerns over a recent lack of transparency in using the Hay Additive pay schedule and awarding pay grade promotions to individuals without proper board oversight.

In 2014, the office of the Kentucky Auditor of Public Accounts examined the issue and prepared a report. The report found changes to the Hay Grade Schedule, a salary additive reserved for administrators based on responsibility level, were not transparently reported to the Board of Education.

After he was hired, White recommended stopping the pay increases until a consultant had been retained and a compensation study had been completed, the lawsuit said.

The lawsuit said Jennifer Dyar, the director of Human Resources whom he supervised, agreed.

Requests for an individual pay grade promotion for a specific person were usually directed to a Personnel Committee for consideration, but not in Chatfield’s case, the lawsuit said.

The lawsuit said White did not know about the pay upgrade for Chatfield, a friend of Dyar’s, until after it was completed. He said Dyar told another employee that Caulk had approved it and White knew about it.

White said after Caulk died and Helm took over, Helm praised White in several emails with no indication that there were any problems or issues with his work performance.

White brought up concerns about Chatfield’s raise in March and April 2021, the lawsuit said.

In a March meeting, he said Helm was concerned that he investigated the raise and went to the administration without involving Dyar.

A June 15, 2021 email from Helm in which she provided the grounds for his employment not being renewed did not mention the Chatfield raise.

The lawsuit said White’s personnel file does not support the grounds for non-renewal cited in the 6/15/21 letter, including a lack of a coherent and inclusive budget approval process. White disputes each of the reasons Helm gave for not renewing his contract.

“This alleged criticism of John is a contrived one to mask the retaliation in non-renewing John’s employment related to the Chatfield pay increase and the process by which it was accomplished, “ the lawsuit said.

White said in the lawsuit that the district’s actions damaged his reputation and violated Kentucky’s Whistleblower Act.

This story was originally published August 25, 2021 at 10:05 AM.