Thursday, December 8, 2016

East Orange confidentially paid out $82,500 to settle whistleblower suit.

On May 31, 2016, the City of East Orange (Essex County) agreed to pay $82,500 to a former employee who said that she was forced out of her job after she complained about "certain improprieties" regarding the finances of some City programs.

In her lawsuit, Linda J. Hobson, who worked as a Budget Officer until her alleged "constructive discharge" on June 1, 2011, said that she found problems when she examined the books of the City's Urban Youth and Development Program, CDBG, Shelter Plus Care, and the Homeless prevention and Rapid Rehousing Programs.  She claimed that vendors "had wrongfully and illegally diverted resources from the program(s) for their own personal use and the personal use of their family members while the municipality turned a 'blind eye.'"  She said that when she complained, she was ridiculed and forced to take early retirement.

The case is captioned Hobson v. City of East Orange, et al, Docket No. ESX-L-364-12 and Hobson's attorney was Frederick Coles, III of Plainfield. Case documents are on-line here.

The settlement agreement contains a confidentiality clause, which prevents the parties to the suit from publicly disclosing the settlement terms.  Fortunately, however, these confidentiality clauses do not trump the public's right to obtain copies of settlement agreements that arise out of lawsuits in which a government agency or official is a defendant.

None of lawsuit's allegations have been proven or disproven in court.  Settlement agreements typically state that payment does not constitute an admission of wrongdoing by any of the defendants.  All that is known for sure is that East Orange or its insurer, for whatever reason, decided that it would rather pay Hobson $82,500 than take the matter to trial. Perhaps the defendants' decision was done to save further legal expense and the costs of trying what were in fact exaggerated or meritless claims. Or, perhaps the claims were true and the defendants wanted to avoid being embarrassed at trial. This is the problem when cases resolve before trial--it is impossible to know the truth of what really happened.