Responsible Personnel Practices in the Public Sector Reason for the Investigation

With respect to the former lead counsel whose employment was the subject of the complaint, the LSJPA Board decided to replace him after he worked six months of his two-year contract. The settlement was structured to be paid out over the course of the next six months, ending August 31, 2008. The monthly payment amounts varied based on withholding requirements, which may have led to the perception that there was a salary increase. Payroll records indicate that approximately $100,000 was paid out from March 2007 through August 2007, during which time the former lead counsel was no longer performing duties for the LSJPA. The LSJPA lead counsel was replaced by an internal staff attorney.

During the course of the investigation the Grand Jury heard two arguments in support of the use of employment contracts: They enable competitive hiring of skilled and qualified individuals because people making a move often want some guarantee of security in order to leave another situation. They ensure continuity within an organization because people tend to stay for the duration of their contracts – rather than seek other opportunities because their tenure is protected by the terms of the contract.

A decision to exit or end an employment contract before its term is complete generally indicates some dissatisfaction or change in situation on the part of one or both parties. When an employment contract is terminated there may be a settlement to avoid lengthy or costly legal action and lead to the lowest cost solution

The use of employment contracts in the recruitment of high-level personnel from outside the LSJPA staff can result in substantial financial risk of public funds.

Merit systems and civil service systems make it possible to provide fair and open competition for positions, apply clear standards and testing for positions, and use established due process to ensure rights are protected. Commendation The Grand Jury commends the LSJPA Board for its intention to manage costs and provide competitively priced legal services to its members. This creative structure and the way that it is administered should make it possible to track and measure cost, performance, and overall value of its delivery specialized legal services. Conclusions As a result of its findings, the Grand Jury questions the use of employment contracts for highly compensated employees within the scope of LSJPA. The management of the employment and release of the former LSJPA lead counsel resulted in a costly situation for Sonoma County and the other entities comprising the LSJPA. The amount of money expended to end the contract could have been used to advantage in the classroom. An employment contract binds both parties, limits flexibility, and may pose problems if one of the parties later determines it is necessary to end the contract. A simple termination resulting from recognition that the initial hiring decision was a mismatch may become a breach of contract resulting in an employer being legally responsible not only for violating the contract, but also for breaching its covenant of good faith and fair dealing. As budgets continue to shrink, we question whether it is appropriate that a publicly funded entity use employment contracts. It may be argued that they are needed to attract and retain personnel and ensure continuity of operations. Current talent acquisition and management practices across many private and civil service employers are based on the development of internal talent and paying competitive salaries for at-will employment while avoiding the financial risk of employment contracts. Further, continuity of operations should be predicated on the development of teamwork and sound performance management practices rather than employment contracts. The Grand Jury concludes that merit systems and civil service systems can form the model for recruitment and hiring practices that are more in line with the fiscal realities our community faces today.