Peoria, former employee file battling claims over severance package

By Philip Haldiman
Mail | X: @PhilipHaldiman

Possible litigation between a former Peoria employee and the city has revealed a political drama that significantly altered the city’s upper ranks over many months leading up to and after the swearing in of Mayor Jason Beck in January.

The city of Peoria has filed a notice of claim against former City Attorney Vanessa Hickman asking that she pay back a severance payment in the amount of $138,795 she received when she resigned from the city on Jan. 5.

Former mayor Cathy Carlat is also named on this claim.

The city alleges through its outside counsel Fennemore that Hickman was not entitled to the severance she received under her employment agreement.

Hickman has sent a counter claim to the city of Peoria, Beck, City Manager Henry Darwin and Assistant City Manager Rick Buss for $1 million disputing the claims and defamation, stating in a letter from her counsel Osborn Maledon, attorneys at law, “There is nothing illegal or wrong in how Ms. Hickman separated from employment with the city of Peoria or the compensation she received.”

Hickman said the city council approved her employment contract, and the city and she followed those terms.

"I loyally served the city of Peoria for almost five years. Now six months later I am having to defend myself against malicious and vengeful actions by city representatives. Defaming me and my character in my current place of employment is unacceptable and nobody should tolerate this treatment," Hickman said.

Carlat said the claim is political.

"This notice of claim letter appears to be politically vindictive," she said. "The complaint against me is without substance and nothing more than malicious prosecution and an abuse of process."

Darwin said the case has nothing to do with politics.

"This is 100% all me trying to fulfill my fiduciary duties to the city of Peoria. I did my own research and felt I should get advice from outside counsel," he said. "We believe that payment to Vanessa Hickman was not made in accordance with her employment contract or city code and the city has received nothing in return for the $138,795 paid to Ms. Hickman from taxpayer funds.”

Vanessa Hickman

Vanessa Hickman

Peoria’s allegations

Before she resigned, Hickman requested the city treat her resignation “in lieu of termination,” pursuant to a clause in her employment agreement, which was approved by council, May 3, 2022.

The clause states Hickman may resign from her position before the contract expires instead of being terminated.

Subsequently, on Jan. 3, 2023, the city claims, Carlat emailed city officials stating that Ms. Hickman was “separating from the city of Peoria ... in lieu of termination.”

Based on Carlat’s representations, the city alleges, the Peoria Finance Department processed a lump sum payment for Hickman in the amount of $138,795, which included one-half of Hickman’s salary for a year, as well as holiday and sick pay that she would not have otherwise received, the claim states.

The claim continues that Hickman was not entitled to the severance payment because she was not “terminated by the city council.” The city’s claim continues that the city manager is required to recommend the removal of the city attorney, which then must be placed as an item on the agenda, provide notice of the item, and voted on by council.

“Here, the city manager never recommended that the city council terminate Ms. Hickman, and the city council never placed Ms. Hickman’s continued employment as an item on its agenda. Hence, the city council never voted to terminate Ms. Hickman’s employment or otherwise decided that she would be terminated,” the claim states. “...The city council never voted on — or even considered — terminating Ms. Hickman. Instead, Ms. Hickman resigned after the election of Jason Beck as the new mayor of the City of Peoria.”

Peoria goes on to allege that if Hickman fails to repay the severance, Carlat will be liable for repayment to the city because she had no authority to direct payment of the severance payment without first receiving approval from the city council.

“By unilaterally deciding that Ms. Hickman’s resignation was ‘in lieu of termination,’ and by authorizing the severance payment based on that decision, Ms. Carlat improperly circumvented the terms and conditions set forth in the employment agreement and the procedures outlined in the (city) charter. Ms. Carlat understood the procedures that needed to be followed in order to satisfy a ‘separation in lieu of termination’ and misrepresented that the end of Ms. Hickman’s employment met that standard. Ms. Carlat is obligated to ensure that the city recovers the improper severance payment,” the claim states.

Counter claim

Hickman’s counter claim states her employment agreement does not define what “separation in lieu of termination” means, nor does it set forth a string of events that must take place before the city attorney can invoke the “separation in lieu of termination” clause. The employment agreement does not say a “separation in lieu of termination” can only take place after the city manager has recommended termination.

“Indeed, the very purpose of the separation in lieu of termination clause is to allow the employee to leave with dignity, without the stain of a pending termination proceeding,” Hickman’s claims states.

More importantly, her claim adds that when interpreting the employment contract, the “surrounding circumstances and the intentions of the parties need to be considered.”

Hickman’s decision to resign from Peoria came amid a change in administration, during which many high-level employees either resigned or were fired leading up to and after Beck’s swearing in.

On Jan. 10, City Manager Jeff Tyne’s existing employment agreement was terminated, and a separation agreement with Mr. Tyne was entered into, making him a “special consultant” for six months with salary and benefits totaling approximately $142,000.

Henry Darwin

Henry Darwin

The claim states this allowed Beck to place Darwin in the position of city manager.

The move garnered controversy from some residents and council members who opposed his appointment because Darwin was neither selected through a city recruitment and selection process nor had any prior experience working in municipal government.

The council narrowly approved Darwin, 4-3, Jan. 10.

Hickman’s claim states since Beck took office and appointed Darwin as city manager in January, the city has removed, terminated or demoted women in prominent positions in Peoria’s city government, including Katie Gregory, a former deputy city manager for the city who was fired last spring.

Defamation

With the exodus of many long-time employees came the re-hiring of Buss in February, who was fired in May 2021 from his position as economic development director, and who Hickman was involved in the process of his termination.

After his termination, Buss went to work as a governmental affairs director for Beck at his personal business TYR Tactical, as well as for his campaign for Peoria mayor.

It is no secret Buss was going to take an influential position with the city of Peoria, and Hickman had “no question that he would act vindictively toward her at the first opportunity,” according to the claim.

Under these circumstances, Hickman treated her resignation as “in lieu of termination.”

“By December 2023, it was plain to see that the new administration would target (Hickman) for replacement as soon as possible. These were exactly the types of politics and circumstances that ‘resignation in lieu of termination’ was intended to cover,” the claim states.

After resigning from the city on Jan. 3, Hickman took employment with the Arizona Attorney General’s Office.

Jason Beck

Jason Beck

The claim adds that in June, Buss, along with a city lobbyist, both believed to be acting on behalf of Beck, Darwin and the city of Peoria, reached out to the Attorney General’s office to defame and retaliate against Hickman, saying libelous things about her in an attempt to have her lose her current job.

The alleged oral communications took place on or about June 28, 2023, claiming Hickman had done something illegal or wrong in resigning in lieu of termination.

“These despicable actions constitute both tortious interference and defamation. It was not enough that the new administration wanted to terminate Ms. Hickman; they also wanted to act adversely to her even after she left, for their own personal retaliatory reasons,” the claim states.

Lastly, Hickman’s claim states she and Carlat are entitled to be indemnified pursuant to Peoria city code.

“Placing the former mayor in the notice of claim letter appears politically vindictive or brought for personal reasons. A complaint against Cathy Carlat would be a malicious prosecution and an abuse of process. A complaint would also raise issues under Rule 11,” according to the claim.

Philip Haldiman can be reached at phaldiman@iniusa.org, or on Twitter @philiphaldiman. We’d like to invite our readers to submit their civil comments, pro or con, on this issue. Email AZOpinions@iniusa.org.

Philip Haldiman
Senior News Editor | Peoria

phaldiman@iniusa.org

Meet Philip
Haldiman is an award-winning journalist who most recently took first place for investigative reporting in 2023 from Arizona Newspapers Association. He joined Independent Newsmedia, Inc., USA, in 2015, covering Sun City West his first year. Since 2016, he has covered the city of Peoria. Prior to coming to INI, he was a reporter with The Arizona Republic for seven years, covering numerous cities throughout the Valley. Before that, he was a freelance writer.

Community: Haldiman spearheads the Peoria Independent Hometown Heroes Awards program, honoring local individuals and businesses that give back to the community. He has hosted local candidate forums over the years and is a member of the Society of Professional Journalists. Haldiman also served as a member of the Journalism Program Community Advisory Board at Glendale Community College. Outside journalism, Haldiman served as a member of the city of Peoria Complete Count Committee for the Census, 2019-2020. Lastly, he has served as a member of his HOA governing board since 2021.

Education: Arizona State University with a BA in Journalism and Mass Communications and a BA in Theater. 

Random Fact: Haldiman is a fourth-generation Arizonan as well as wrote and produced an autobiographical comic book about his time spent in Hollywood and his life as a cult film star.

Hobbies: He enjoys hiking Arizona’s mountainous landscapes and is currently working on a play for the stage.