Ex-Puyallup city manager files claim for wrongful firing

The former Puyallup city manager who lost his job after sanctioning the mayor and falling out of favor with a slim majority of the City Council has filed a wrongful termination claim against the city.

Ralph Dannenberg’s claim of retaliation could be a prelude to a lawsuit against his former employer. It doesn’t list a total sum of damages but mentions loss of income of $82,020, plus emotional distress and harm to his reputation, attorney fees and other damages to be proven at trial.

Dannenberg’s attorney, Joyce L. Thomas, called the timing of his dismissal last summer “very suspect.”

“There had been no evidence that Mr. Dannenberg was not continuing to do his work in a stellar manner,” Thomas said last week. “His last review (in July 2011) said that he was doing an excellent job.”

Puyallup officials say Dannenberg was an at-will employee who served at the council’s discretion and could lose his job at any time – and he did lose it when the council decided it no longer trusted him. They say his removal in no way violated the employment agreement he signed in 2010.

Under that agreement, Dannenberg continued to receive his salary for three months after his discharge and will have health insurance coverage through next July, said deputy city attorney Steve Kirkelie.

Dannenberg said he’d asked for six months salary, which is the main part of his damage claim.

In an interview Friday, he said he’s always understood that city managers don’t enjoy great job security.

“I knew from day one that I could be terminated if they didn’t like the way I part my hair,” he said.

But he said he’s certain his firing was the direct result of Mayor Rick Hansen’s embarrassment from an “unwelcome contact” complaint, which a female employee brought to Dannenberg’s attention and which a city manager is required to take seriously.

“There’s no doubt in my mind that this was retaliation,” Dannenberg said.

Hansen and other members of the council majority have said their trust issues with Dannenberg ran deeper than that.

“There are seven people on council, and we are all individual people, and I think decisions are not made on any one incident,” Hansen told The News Tribune.

He said his vote to part ways with Dannenberg was “the right thing to do.”

The city has 60 days to respond to Dannenberg’s claim, which it received on Nov. 28 and has turned over to its insurance provider. The News Tribune obtained a copy last week.

‘THE TRIGGERING EVENT’

Dannenberg, 64, ran the day-to-day business of Pierce County’s third-largest city for more than two years. He had led Puyallup’s parks department for 12 years when he was given control of the city’s $37 million general fund budget, first as interim and then as permanent city manager.

He left in July when his fortunes changed quickly.

The month started normally enough, with the council saying Dannenberg was due a performance evaluation later this year. The month ended with a 4-3 vote in which the majority said he had lost their confidence while the minority said he was being forced out unfairly.

Thomas says “the triggering event” occurred in May. That’s when the city manager gave a written sanction to Hansen for inappropriately touching a subordinate employee on two occasions in April – once on her shoulder, once on her hip.

After consulting with the city attorney, Dannenberg wrote a letter to Hansen that raised concerns about “boundary issues” and said “the city cannot tolerate conduct of this type.” Hansen was asked to attend sensitivity training, which he did.

“(Dannenberg) was instructed to handle the matter in a particular way,” Thomas said. “Our contention is that in his following the advice of counsel, he was retaliated against.”

Some council members have said Dannenberg’s mistake was not the original written sanction of the mayor; rather, it was how Dannenberg handled it after the news media obtained the memo. They criticized him for releasing details in a way that fueled speculation and rumor that the “unwelcome contact” was more serious. Councilman Steve Vermillion said the council was left in the dark too long.

After the council came out of a two-hour closed-door session on July 31, four of the seven members said Dannenberg wasn’t meeting their expectations, had different goals and no longer could be trusted.

Members of the minority, however, said Dannenberg had looked after the city’s interests, including that of the employee who complained about the unwanted touching. They said he deserved a full performance evaluation. Councilman John Palmer said firing the city manager appeared retaliatory.

While the majority acknowledged removing Dannenberg was partly connected to his handling of the mayor’s sanction, they said it went deeper. They said he had stonewalled them on budget information, hired non-essential employees and shown disrespect to the council. Deputy Mayor John Knutsen said Dannenberg lied to council and hated the mayor.

Dannenberg said Friday he was always a responsive city manager when the whole council asked him to do something. He said he made cuts to departments, not unnecesary hires. And he said “life’s too short” for hostility and deception.

He said it’s telling that Hansen and his allies never brought up those allegations until the embarrassing touching incident went public in July.

Hansen did not recuse himself from the July 31 vote – a fact that other council members questioned and that Dannenberg’s attorney calls “curious.”

Hansen said he felt justified casting a deciding vote to terminate the city manager in whom he and others had lost trust.

“There were certain things that came to my attention that were not related to my incident, and they were huge,” Hansen said last week.

He would not elaborate but said other council members discussed them openly at the July 31 meeting.

“I let other people do the speaking so that there was no way I could be accused of anything,” he said.

STEPS TO AVOID LAWSUIT

Puyallup has a history of paying money to cut ties with city managers.

Gary McLean, who was replaced by Dannenberg in 2010, walked out the door with a $101,200 separation agreement that exceeded what the city was obligated to pay him.

In the months before Dannenberg filed his claim, his attorney tried a similar approach that would have insulated the city from legal action.

“We tried to negotiate a resolution to our demand, and it was unsuccessful,” Thomas said.

Kirkelie, the deputy city attorney, confirmed that those discussions took place. He said the City Council held fast to the employment agreement that Dannenberg signed in November 2010.

Kirkelie said Dannenberg never asked for the city hearing he was entitled to if he wanted to challenge his dismissal.

Dannenberg received $41,011 in gross salary for three months after his termination, $33,082 in vacation and sick leave cash-out, and a full year of health insurance premiums for him and his wife valued at $1,541 a month, according to figures Kirkelie provided The News Tribune.

Dannenberg said he’s planning to retire, though he may do some consulting work. He continues to live in South Hill.

Interim City Manager Bill McDonald is in charge of operations at Puyallup City Hall.

AN EVEN UGLIER END?

Kirkelie said the city’s legal department notified all seven council members about their former city manager’s claim for damages. He said – and several council members confirmed – that they haven’t discussed it as a group or individually.

Hansen said he’s aware of the claim but has tried to keep his distance because of his personal involvement in the “unwelcome contact” episode.

Tom Swanson, one of the three council members who opposed the termination, said he thought if a claim was coming, it would have come sooner.

“I don’t understand the legal timing of everything, so I thought it was all behind us,” he said.

Kent Boyle, another member of the council minority, said it’s unfortunate and “ugly” that the council’s relationship with Dannenberg went off the tracks, and he hopes it doesn’t go down the road of litigation.

“I did not agree with that decision (to fire him), and I still don’t,” Boyle said. “I haven’t changed my mind. But I’m part of the council, and I have to live with it.”