Hazel Crest will pay nearly $300,000 as part of a settlement with its former village manager, who was fired in June 2015.
The Village Board on Tuesday approved the agreement with Marlo Kemp, whose employment contract with Hazel Crest had also prompted a lawsuit by the village seeking to void a severance provision in that contract.
Kemp was hired in 2012 as the village’s finance director and was appointed village manager in March 2014 following the retirement of former manager James Whigham Sr.
The village placed Kemp on paid suspension in May, then fired him the following month. A provision of Kemp’s contract called for a for-cause firing to be heard by an arbitrator, and some testimony in the matter was heard by an arbitrator in recent weeks, but a settlement was reached prior to Kemp presenting evidence and the arbitrator making a ruling, according to Kemp and John Murphey, Hazel Crest’s village attorney.
The village had alleged that Kemp was, among other things, insubordinate and failed to perform his duties. The charges were not ruled on by the arbitrator, and the agreement says that Kemp’s firing for “purposes of closure” should be viewed as having been for “no cause.”
The village will make an initial payment of $125,000 to Kemp early next month, then make monthly payments totaling another $173,000 over the following 18 months, starting in June, according to the agreement.
In a lawsuit filed after his firing, Hazel Crest asked a judge to void the severance provision of his contract, which it said would have obligated the village to pay the equivalent of four years’ salary to Kemp, or more than $500,000. The court later ruled it couldn’t weigh in on the contract’s legality until an arbitrator heard testimony related to Kemp’s firing, and the village could have refiled the complaint if the arbitrator had ruled in Kemp’s favor.
The village made a “business decision” in reaching a settlement before the arbitrator heard the full case, Murphey said Wednesday. Had Kemp been successful, the village would have had to pay not only the full severance amount, but Kemp’s legal costs as well as fees related to the arbitration, which could have been in the neighborhood of $800,000, the attorney said.
“The settlement costs to the village are considerably less” than what the village potentially faced, Murphey said.
Kemp said Wednesday he was “satisfied and relieved this is over,” noting that the settlement amount is “not a trivial amount of money.” He said the acknowledgment in the settlement that his firing was for no cause was particularly gratifying.
“There was no cause for the termination,” he said. “Those charges were simply brought forth by the village so they would not have to abide by the no-cause provision of the contract.”
Before being hired by Hazel Crest, Kemp was chief financial officer for the Cook County Forest Preserve District, hired by former County Board President Todd Stroger and dismissed by Stroger’s successor, Toni Preckwinkle, in 2011.
Hazel Crest Mayor Vernard Alsberry, elected in 2013, was at odds with Whigham over a salary increase the manager had received and disagreed with the process for elevating Kemp to the village manager’s job after Whigham retired.
The village’s lawsuit notes that at the time Kemp was named village manager, the Village Board was controlled by trustees who were politically aligned with Whigham. The move to oust Kemp came after April’s election gave Alsberry and his allies a majority on the board.