HomeMy WebLinkAboutC-4266 - Mutual Separation AgreementCITY OF NEWPORT BEACH
OFFICE OF THE CITY ATTORNEY
David R. Hunt, City Attorney
June 10, 2009
To Whom It May Concern
RE: Mutual Separation Agreement between Chief John Klein and the City of Newport
Beach
There are standard questions we anticipate being raised related to the Mutual Separation
Agreement between the City of Newport Beach and Chief of Police John Klein. We have
prepared a FAQ statement addressing the questions we believe are likely to be raised.
We enclose a copy of the FAQ along with a copy of the Mutual Separation Agreement and
Chief Kleins Employment Agreement.
We hope this FAQ answers all questions. If not, please contact Tara Finnigan, Public
Information Manager of the City of Newport Beach, 90-644 -3035. If there are legal
questions related to the Agreement, please contact David R. Hunt, City Attorney, 949 -644 -
3131.
Sincerely,
OFFICE OF THE CITY ATTORNEY
\��
WM-
David R.
C4ty Attorney
DRHIern
Enclosures
cc: Mayor and City Council
Honer Bludau, City Manager
John Klein, Chief of Police
Tara Finnigan, Public Information Manager
3300 Newport Boulevard • Post Office Box 1768 • Newport Beach, California 92658 -8915
Telephone: (949) 644 -3131 • Fax: (949) 644 -3139 • www.city.newport- t)each.Ca.us
CITY OF NEWPORT BEACH
OFFICE OF THE CITY ATTORNEY
TO: Whom It May Concern
FROM: Da ' ernefi
RE: F.A.Q.: Mutual paration Agreement
A09 -00476
DATE: June 10, 2005
FAQ
In anticipation of questions regarding the Mutual Separation Agreement (attached as
Exhibit W) between the City of Newport Beach and John Klein, Chief of Police, we answer
the expected questions as follows:
What is meant by °Mutual Separation Agreement"?
Answer. The standard methods for separation of employment fall in one of two
categories, termination by an employer or termination by an employee. This particular
separation falls into neither category. Neither John Klein nor the City of Newport Beach
desire to end the employment relationship. Both have come to the conclusion, however, it
is in the best interest of the Newport Beach Police Department that a new Chief be
appointed for the department. Therefore, the City of Newport Beach and the Chief of
Police have mutually agreed to a separation of the employment relationship. This mutual
separation is based upon and consistent with the terms of the underlying Employment
Agreement between the City of Newport Beach and Chief John Klein. (Copy of the
employment agreement Is attached as Exhibit "B °)
2. What is the basis for the timing of the Agreement?
3.
Answer. The Chief has been considering the possibility of early separation from the
City for approximately one month. The City Council was first presented with this idea two
weeks ago for discussion. While the Chief was willing to provide the 90-day notice
required under the Agreement, it was decided that based upon all the circumstances
facing the City including the recruitment of a new City Manager and the circumstances
facing the department, the separation should take place in July, after the 0 of July
weekend. July 10, 2009 was chosen.
Answer All of the compensation being said to Chief Klein arises out of and is
consistent with the underlying Employment Nreement or is otherwise required by
California law. Chief Mein sought nothing more than a fair separation from the City on fair
terns based upon his Employment Agreement and the City Council seeks to honor the
Employment Agreement in the context of this mutual separation. Therefore, all of the
F.A.Q. Mutual Separation Agreement
June 10, 2009
Page: 2
compensation is paid consistent with and arising out of the underlying Employment
Agreement. The compensation is as follows:
a. Notice Payment: The provisions of Section 5 of the Employment Agreement
contemplates 90 days notice for termination of employment so long as there is not
cause for tenination. The City has no cause for termination and does not believe
there is cause for termination. Therefore, separation from the City is through "at will"
separation. The Chief is required, pursuant to at will separation, to give 90 days notice.
It was determined by the parties that 32 days was the appropriate notice based upon
the circumstances referenced above. Therefore, there was a balance of 58 days which
Chief Klein would otherwise be compensated for by the City. The Notice Payment was
based upon that 58 days and calculated utilizing Chief Klein's daily compensation and
multiplying it by the balance of business days that would have been left in the 90 day
notice, for a total payment of $43,498.95. Therefore, this payment is consistent with
and arises out of the underlying Employment Agreement.
b. Severance Pay: Section 5(c) of the Employment Agreement anticipates the
payment of 6 months severance when there is an at will separation from City
employment. Again, there is no cause for separation of Chief Klein from the Citys
employment, therefore, it is an at will separation and Chief Klein is entitled to the 6
months severance pay. The 6 months severance pay equals $137,924.11. This is
based upon Chief Klein's total compensation package for 6 months.
C. Leave Balances: Section 6 of the Employment Agreement and California law
require that an employee receive payment for all leave balances that have accrued
during employment at the time of separation. The value of Chief Klein's accrued leave
package is $68,656.16. Therefore, this payment arises out of and is consistent with
the Employment Agreement and is required under California Law.
4. Why is there a "aeneral release?
Answer. It Is standard practice in a separation agreement that the employee and the
employer mutually release each other from any and all claims which may east against the
other. The purpose of such a release is to allow the parties to move forward into the future
without concern with what may or may not have occurred in the past. There are no facts
that either party knows of which could give rise to claims at this stage. This provision is
simply a standard, boiler plate, provision in a separation agreement and serves both
parties so that they can move forward into the future.
5. Why is there an °Indemnity and Cooperation° clause?
Answer: Government employees are entitled to defend and indemnity from the
governmental entity they serve based upon any claims which may arise out of their
performing their duties consistent with the course and scope of their employmer. There
are no pending claims against John Klein. It is the reality of public employment and of
being an "appointing authority' that claims could arise in the future. The City is required
under the Government Code to then defend and Indemnify the employee so long as the
F.A.Q. Mutual Separation Agreement
June 10, 2009
Page: 3
actions arose out of the course and scope of employment. This clause in the Agreement
simply acknowledges that responsibility. Additionally, a public employee is required to
cooperate in the defense of all such claims should they arise in the future. This provision
of the Agreement again acknowledges that simple fact. Additionally, the Chief has agreed
to assist the City of Newport Beach in any other issues that may arise out of the
performance of his duties while employed by the City. This provision simply acknowledges
that as Chief of Police he had responsibilities that could take time to work through and his
cooperation with the City may be necessary in addressing those issues.
Please contact Tara Finnigan, Public Information Manager, (949) 644 -3035 or David R.
Hurd, City Attorney, (949) 644 -3131 If you have any questions.
1
MUTUAL SEPARATION AGREEMENT
This Mutual Separation Agreement ( "Agreement ") is made and entered into by and
between the City of Newport Beach, a municipal corporation and a Charter city
(°Employer"), and John Klein ( "Employee ") (Employer and Employee shall sometimes
be referred to herein collectively as the 'Parties ").
RECITALS
A. WHEREAS, Employer and Employee entered into that certain Employment
Agreement dated June 29, 2007 by which Employee was selected as the Polio
Chief for Employer ("Employment Agreement").
B. WHEREAS, Employer and Employee mutually desire to sever their employment
relationship on terms and conditions satisfactory to each; and,
C. WHEREAS, Employer and Employee acknowledge that Employee will retire from
his employment with Employer on the Separation Date defined In paragraph 1
below, and
NOW THEREFORE, for good and sufficient consideration, as set forth below, the parties
agree as follows:
AGREEMENT
1. Timing. Employee shall retire from Employer's service effective dose of business
July 10, 2009 ( "Separation Date'). Employee shall announce his leaving of Employer's
service on June 9, 2009.
2. Leave Severance and Notice Provisions of Emulomm nt Agreement Honored.
Employee shall be compensated for severance, notice, and any leave banked with the City
as set out under the contract and required by law. Those sums shall be paid on the
Employee's Separation Date In one lump sum. The lump sum shall be made up as
follows:
a) Pursuant to the notice provisions of Section 5 of the Employment Agreement,
Employee shall receive a lump sum payment for the difference between the
business days within the ninety (90) days notice set out under the Employment
Agreement and the business days between the announcement ncement of Employee's
refinement and Separation Date, for total notice compensation in the amount of
forty-three thousand, four hundred and ninety -eight dollars and ninety-five cents
($43,498.95.)
b) Pursuant to Section 5(C) of the Employment ggreement, Employee shall
receive severance pay equal to six months of his total compensation from the
end of the Notice Period, a total of $137,924.11 (One hundred, thTt1y-seven
thousand, nine hundred and twenty-four dollars and eleven cents).
0 Pursuant to Section 6 of the Employment Agreement and California Law,
Employee shall receive $$68,655.15 based upon Employee's leave balances as
of Pay Period Ending May 22, 2009, as payout for all compensable leave
balances attributed to Employee. This amount is based upon the assumption
that no sick leave, flex leave or comp time will be taken by Employee after Pay
Period Ending May 22, 2009. This payment is based on Police Management
Association Part C Medical Expense Reimbursement Plan ( "MERP ")
contribution designations.
d) All payments set out above shall be subject to withholding taxes as required by
law.
3. General Release. In consideration for the foregoing, the Parties hereby release
and discharge one another, and each of their officers, directors, agents, employee%
representatives, attorneys, successors, and assigns, and each of them, and all persons
and/or entities acting by, through, under, or in concert with such persons (collectively
'Parties' Releasees") from any and all actual or potential claims, obligations, demands,
causes of action, know or unknown, which each Party has, may have, or may claim to
have against Parties' Releasees which relate in any way or manner to Employee's
employment with, and/or separation from the Employer.
a. Without limiting the generality of the description, the claims herein released include,
but are not limited to, claims based upon:
1) Title VII of the Civil Rights Act of 1964;
2) The Age Dlscrtmination in Employment Act;
3) California statutory or decisional law, including the Slate Fair Employment
and Housing Act, pertaining to employment discrimination, wrongful discharge or
breach of public policy, and laws governing workers compensation and any on the
job injuries of any kind; and,
4) Any and all State, federal and local laws as well as common law for breach
of contract, wrongful termination, employment discrimination, negligent or
intentional infliction of emotional distress, defamation, fraud, concealment, false
promise, negligent misrepresentations, intentional interference with contractual
relations, breach of the covenant of good faith and fair dealing, and
misrepresentation generally.
b. The Parties expressly waive and relinquish all rights and benefits under Section
1542 of the Califomia CMI Code which provides:
"A general release does not extend to claims which the
creditor does not know or suspect to exist In his or her favor at
the time of execuling the release, which tf known by him or her
must have materially affected his or her settlemard with the
debtor."
Page 2 of 5
C, The Parties hereby agree that no action, suit or proceeding has been or shall be
brought or complaint filed or initiated by either Party or any agent, assignee or
spouse of Employee in any court, or with any governmental body with respect to
any matter or course of action based upon any facts that might have occurred prior
to the date of this Agreement whether known to the Parties now or discovered by
either Party hereafter.
d. The Parties acknowledge that either Party may have claims that are covered by the
terms of this Agreement which that Party has not yet discovered. The Parties
acknowledge that each Party does Intend to release any and all such unknown or
unsuspected claims arising out of Employee's employment by Employer.
4. No Admission of Llabli ty. The Parties have entered into this Agreement in order to
facilitate a mutual separation and, while at this time there are no disagreements or
disputes between the Parties, the Parties agree to mutually release each other from any
dispute the may be discovered or may develop in the future arising from Employee's
employment with Employer. As such the Parties hereby settle all disputes and differences
between them, without admitting liability or wrongdoing by any party. The Parties agree
that this Agreement and the payment by Employer of the consideration described herein Is
not an admission by Parties' Releasees of any wrongdoing or fiabirdy.
5. Indemnity and Cooperation. The provisions of Section 9 of the Employment
Agreement, entitled °Indemntfrcation by City; shall survive the tem>tnafion of the
Employment Agreement and shall continue to be effective between the parties in
connection with the defense of any action, stilt or proceeding and in connection with any
appeal, which has been brought against Employee arising out of the performance of
services as an officer or agent of Employer during the course of Employee's employment.
Ernployee shalt cooperate with and assist Employer In the defense or prosecution of any
matter in which Employee was Involved arising out of his employment with Employer,
including, but not limited to, criminal prosecutions, defense of tort claims, civil litigation
and/or assistance in defending or prosecuting matters arising out of discipline of
employees of Employer.
6. Const►uetton. This Agreement has been negotiated and discussed between the
parties and It reflects their mutual agreement regarding the subject matter of this
Agreement. Because of the nature of such negotiations and discussions, neither party
shall be deemed to be the drafter of this Agreement and therefore no presumption for or
against the drafter shall be applicable in interpreting or enforcing this Agreement.
7. SeverabiliEy. If any provision of this Agreement, or the application thereof to any
parson or circumstance. is found to be Invalid, the remainder of the provisions of this
Agreement, or the application of such provisions to persons or circumstances other than
those which it Is found to be Invalid, as the case may be, shall not be affected thereby.
8. AcMoe of Counsel. Employer has advised Employe to consult with a private
Page 3 of 5
attorney prior to executing this Agreement; Employee fully understands the right to
discuss all aspects of this Agreement with a private attorney, Employee has read and fully
understands all of the provisions of this Agreement and is freely and voluntarily entering
into this Agreement. Employer was represented by and assisted in the negotiation and
preparation of this agreement by its Office of the City Attorney.
9. _Complete Aareement. This is the entire Agreement between employer and
Employee with respect to the subject matter herein and this Agreement supersedes all
prior and contemporaneous oral and written agreements and discussions.
10. Acknowledgment and Waiver of 21 Days To Consider. Employee has been
advised of the right to consider this Agreement for up to twenty -one (21) calendar days
prior to its execution and voluntarily waives this period, electing with full knowledge and
consent to execute this Agreement at this time.
11. Revocation. Employee may revoke this Agreement for a period of seven (7)
calendar days following its execution. Said revocation must be In writing, must
specifically revoke this Agreement, and must be received by Employer, at the Office of
the City Attomey, prior to the end of the seventh day following Employee's execution.
Upon expiration of the seven (7) calendar day period, this Agreement becomes effective.
enforceable and irrevocable.
Page 4 of 5
IN WnNEss To AGREEMENT To Tree Asove PRowsrorvs the Parties have affixed their
signatures on the dates noted below.
EMPLOYEE
Jahn Klein
EMPLOYER
CITY OF NEWPORT BEACH
(As authorized by action of the Cfty
Council in Closed Session on June 9, 2009)
By. Zi-
Hamer Bludau
City Manager
APPROVED AS TO FORM:
Robert Aaronson, Esq.
Attorney for Employee
OFFICE OF THE CITY ATTORNEY
ky r�
David R. Hunt,
MAttorney
Attorney for ..
Aa9WM
"AW8 ,A9
Page 6 of 5
Date: 6 ` V'e
Date.
Date:
Date:
APPROVED AS TO FORM:
Law Offices of Robert Aaronson
By Q44t�--
RobedAaronson, Esq.
Attorney for Employee
OFFICE OF THE CITY ATTORNEY
sy
David R. Hunt,
City Attorney
Attorney for Employer
A09A0478
AMWSq ez6MA9
Page 6of45
Date: UL I0 2-001
Date:
EMPLOYMENT AGREEMENT
The City of Newport Beach CCKy) and John J. Klein CKteln °) agree as follows:
1: The City Manager has selected Klein to succeed Bob McDonetl a$ the Police Chief for the
City of Newport Beach. Klein was selected for his long service to the Department, having
served the Department for 27 years, and he possesses the knowledge and leadership
abffities those years of experience will bring to the Department. The Department continues
to undergo a significant management turnover as a result of planned retirements and
promotions and City desires that the new Chief Commit to a minimum of five years to add
stability and manage change.
2. City desires assurances that Klein will continue to cam as Poke Chief for at least five
years. Klein desires to continue in the employment of City for at least five years consistent
with his commttment to ft City Manager and the specified terms of this Agreement
THEREFORE, in consideration of the above recitals and of mutual promises and conditions in this
Agreement, it is agreed as totiows:
SECTION 1. Emolovmentas Police Chief
City shall employ Klein as Police Chief of the City of Newport Beads and Klein agrees to use
all reasonable efforts to serve in that capacity for a minimum of five years and to perform the
functions and duties of that position as specified in the Municipal Code of the City of Newport
Beach and other relevant Stale Codes. Klein shall also perform other duties assigned by the
City Manager, without additional compensation, so long as those duties are related to matters
of concern to the City of Newport Beach or cities generally and are performed by other
management employees of other municipalities and are not inconsistent with his
responsibilities and obligations as a Peace Officer,
SECTION 2. Term of Aareemen
A. Subject to earlier termination as provided for in this Agreemard, Klein shall be employed for
a term beginning July t, 2007 and shag remain in effect unfit otherwise terminated by either
party according to the terms and conditions outlined in Section 5 ef this Agreement
B. During the term of this Agreement, Klein shall devote such time, interest and effort to the
performance of this Agreement as may be fairly and reasonably necessary but not less
than 81 hours every two weeks, unless on paid leave or unpaid leave approved by the City
Manager. Klein may at his option adopt a 9181 schadufe.
SECTION 3. Virtles and Aufhori)y
During the term of this Agreement, City shall employ Klein as Chief of Police, and Klein shall
be vested with the full power and authority to manage and conduct all the business of the
Police Department as Is provided for by the City of Newport Beach Municipal Code and the
laws of the State of California, subject to %a management and authority of the City Manager.
SECTION 0. Compensation
A. On the effective date of this Agreement which is July t, 2007, City shall pay Klein at the
base pay of $770,000 (one hundred and seventy thousand dollars) along with other salary
related compensation and benefits as are provided to Police Management personnel, paid
at the same time and in 26 equal installments. As Police Chief, John Klein will receive the
same pay adjustments, special pays and fringe benefits provided to the Police
Management Association through MOU negotiations (current and future).
B. In addition, the City Manager may adjust the rate of Klein's base pay within the salary
range for Police Chief whenever the compensation of other City Key & Management
personnel is adjusted, or whenever and in such a manner as to keep the
compaction/separstion of those rates at the now current rate between the Police Chiaf and
the Police Captains.
C. City shall have the right to deduct or withhold fPom Klain's'cornpengation any and all sums
required for Federal income and Medicare related tare and all State or local taxes now
apPlcable or that may become applicable in the future. City may also continue to deduct or
withhold from Klein's oompemation any and all sums Klein Is obligated to pay because of
participation in plans or programs described in Section 0 of this Agreement.
SECTION 5. Termination of EmpiovmentlSeverance PAY
A. Klein may terminate this Agreement by giving the City at least ninety (90) days prior written
notice of termination.
B. City may terminate Klein, without cause, upon notice by the City Manager, provided,
however. Klein may not be terminated within ninety (00) days after any municipal election
for the selection or recall of one or more members of the City Council. Klein shall be
famished with written notice stating the City Manager's intention to terminate this
Agreement. Klein would be entifled to a "name clearing' hearing with the'Chy Manager In
the event he Is tenntnafed for cause.
C. Klein shall receive severance pay equal to sir months of his total compensation as of the .
date of termination, unless he Is terminated because of criminal conduct, malfeasance in
office or a gross abuse of discretion.
SECTION 6. Employee Benefits
A. Klein shall accumulate Administrative Leave at to rate of 80 hours per calendar year and
Flex Leave at the rate of 26 days per year, or at the Police Management rate of accrual,
whichever is greater, and shall be paid for any unused Flex leave atoned at the
termination of this Agreernent. Administrative leave and flex leave shall be used and paid in
the same manner as provided by the City Employee Policy Manual.
'8. Klein shall be eligible to receive the some health benefits currently alfonied, and oontimre
at a rate consistent with the allocation for Other Police Management personnel, Including
the contribution by City to Klein's MERP account.
C. Klein shall be entitled to participate in plans and programs available to other Police
Management personnel, such as short-term and long-term disability plans, file insurance
plans and deferred compensation plans.
2
U City agrees to pay the annual premium for Klein to the Califomia Peace Officers
Association (CPOA) Legal Defense fund for independent legal representation on matters
affecting the course and scope of his employment.
E, The provisions of the then current Personnel Rules, Regulations and Policies as web as
those provisions of the City Charter and Municipal Code that relate to the terms and
conditions of employment shall, except to the extent inconsistent with the terms of this
Agreement, apply to Klein as they are applied to other management employees provxfad,
however, Klein shall not be entitled to any compensation or compensatory time off for
overtime,
F. Klein shall be provided with an automobile that may be used for City business as well as
for personal use within a 100 mile radius of the City; however, Klein shall purchase
gasoline for the automobile when used for reasons other than City business in the event
such use falls outside of the one hundred mile radius of the City. Klein shall report all such
Personal use to the City Manager when the latter occurs.
G. Klein shag be provided with the required complete Police uniforms and related equipment
consistent with his responsibilities.
SECTION 7. Business Expenses
City shelf reimburse Klein for all reasonable bmineas expenses actually inarred by Klein in
the performance of services pursuant to this Agreement.
SEC71ON L ' M..eetinas and Conferences
During the tens of this Agreement, Klein shall, at City expense, be entitled to attend a
reasonable number of focal, State and National meetings and conferences as funded to the .
Police Department Budget and which are relevant to his performance of service pursuant to
this Agreement.
SECTION 9. Indom ilftcatlon by City
City shall, to the maximum extent permitted by law, indemnify and hold Klein hanniess for any
acts or decisions made by Kim in the course and scope of employment To the some extant
City shall pay and advance all expenses, including reasonable attorney's fees and costs of
cowl approved settlements, actually and necessarily incurred by City in connection with the
defense of any action, sutt or proceeding and in connection with any appeal. which has been
brought against Klein by reason of his performance of services as an officer or agent of the
City
SECTION 10. General Provisions
A. Klein shall serve at the pleasure of the City Manager and may be terminated "at wig' in
accordance with Section 5 of this Agreement
B. Any notice required by this .Agreement shag be In writing and deemed given when
personally delivered (to the City Manager in the case of the City), or .deposited in the
United States read, registered or certified, with postage prepaid end return receipt
requested, and properly addressed'.
C. This Agreement represents the entire understanding of the parties and any modification is
effective only If it is in writing and signed by the party to be charged.
SECTION 11. Severabifity
It is understood and agreed that W any part, tern, or provision of this Agreement is held by the
courts to be Illegal or in conflict with the laws of the State of California, the validity of the
remaining portions of the Agreement shall not be affected and the rights and obligations of the
parties shall be construed and enforced as if the Agreement did not contain the particular part,
term, or provisions.
Dated: �do,
Dated: a Z9 24w7
ATTEST.
LaVonne Harldess, City Clerk
4
CITY OF NEWPORT BEACH
A Munldpal Corporation
By: 'f '
er Bludau, ft Manager
APPROVED AS TO FORM:
/� dam..... �• dt.........
Fo✓ Robin Clauson, CityAttoiney