The Lexington Public Library must pay $927,491 to Kathleen Imhoff, its former chief executive officer, because of the way it terminated her employment in July 2009, an arbitration panel ruled this week.
The arbitrators said Imhoff had a four-year employment contract that allowed the library board of trustees to fire her for cause and not be obligated to continue paying her $137,035 annual salary and benefits.
However, the library board instead dismissed Imhoff without citing a cause. Her contract did not specify what her compensation would be in such an event, so the library must honor the remaining two years of her deal at a cost of $446,129 and pay damages, interest and fees totaling $481,362, the arbitrators said in their legally binding decision.
The case returns to Fayette Circuit Court, where Judge Thomas Clark is expected to hold a hearing on it June 7. Richard Getty, Imhoff's attorney, said that he hopes the judge will accept the arbitrators' ruling "unless something extraordinary or strange happens."
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"I don't see where there's any grounds to do anything but enforce it," Getty said. "From Mrs. Imhoff's point of view, she feels vindicated after several years of struggling to get through this whole process. She wishes it had been avoidable."
Ann Hammond, who succeeded Imhoff as the library's executive director, declined to comment on the ruling Thursday, saying she had not seen it. Library attorney J. David Porter said he could not comment until the June 7 hearing before Clark. The library has insurance policies, but it's not clear how much of the cost from this case would be covered by insurance, Porter said.
The library board dismissed Imhoff 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 work office had been broken into on three occasions, allowing someone to tamper with her computer.
In 2010, Imhoff sued the library for more than $5 million in damages. She alleged that she was fired in violation of her contract, that she was publicly defamed by the library board chairman and that she was discriminated against because she is a woman. Clark dismissed the second and third claims but referred the first to arbitration.
The arbitrators said they ruled only on the legality of how Imhoff was fired, not on the circumstances surrounding her dismissal.
"Our jurisdiction is limited to claimant's breach of contract claim," arbitrator Samuel DeShazer wrote.
The library is an independent non-profit agency, although it runs on public money and is overseen by a board nominated by the mayor and confirmed by the Urban County Council. Last year it reported $15.1 million in revenue.
Imhoff, now 67, is unable to find professional library work because of negative publicity about her dismissal, Getty said. Of the money awarded to her in arbitration, $228,333 was "consequential damages" for lost professional opportunities. She also received $202,337 in pre-judgment interest at 8 percent a year for four years; $30,960 for diminished Social Security retirement benefits; and $19,730 for her share of the arbitration fees.
Getty said the library board could have avoided more than half the cost it now faces — not to mention its own legal bills — by giving Imhoff the remaining salary and benefits it owed her in 2009 when she was dismissed, as she requested before suing.
"It's sort of poetic justice in a way," Getty said. "They wouldn't listen. They delayed and they stalled. Now they've lost and they're paying the price."