MARCH 11, 2008
A systemic dialogue was scheduled to be held at 6:00 p.m. in the Rio Conference Center at Rio Salado College in Tempe, Arizona, pursuant to A.R.S. §38-431.02, notice having been duly given.
Don Campbell, President
Colleen Clark, Secretary
Linda Rosenthal, Member
Jerry Walker, Member
ABSENT: Scott Crowley, Member
Casandra Kakar for Anna Solley
Mary Kay Kickels
Karen Mills for Linda Thor
Attendance: Approximately 55 people
SYSTEMIC DIALOGUE (6:05 p.m. through 8:05 p.m.)
Chancellor Dr. Rufus Glasper welcomed everyone to the evening’s Systemic Dialogue focused on the topic of “Legal Challenges at MCCCD – Dispelling The Myths.” He expressed appreciation for everyone’s attendance in view of it being Spring Break. He introduced the new president of Mesa Community College, Dr. Shouan Pan, who came forward to make a few remarks. Dr. Pan expressed appreciation for people’s warm welcome and support. He stated that this was a great opportunity and he held high expectations. He further remarked that he looked forward to working with everyone on the great challenges before him.
The Following Presentations Were Made During the Evening
Legal Department Overview
Pete Kushibab, General Counsel, explained that the purpose of the first segment of the evening’s dialogue would focus on dispelling myths at MCCCD regarding litigation by looking at misconceptions that existed within the system. The following misconceptions were addressed:
1. Maricopa settles all claims and lawsuits
2. All settlements are done in secret, outside of public view
3. Maricopa’s response to litigation is reactive only
The Office of the General Counsel is staffed by three attorneys, a risk management office, and a Governance & OMBUDS Services office. One attorney is responsible for student laws, another is responsible for contracts and business law, and the third is responsible for governance and student affairs.
Mr. Kushibab provided the following information pertaining to the misconceptions:
Misconception #1: Maricopa settles all claims and lawsuits. Most litigation in this country settles and is not resolved by trials but rather through agreements reached between parties. Litigation resolved by settlement. Many cases that MCCCD has gone to court on have been ruled in favor of MCCCD. In executive sessions, these cased are disclosed with the Governing Board. Any case that is settled upon is done so because of vulnerability that exists and would not be in the District’s best interest. There is reliance on outside counsel and litigation is represented by outside counsel. Factors in settlements:
• Chances of prevailing in a trial
• Saving dollars on attorneys’ fees
• Public perceptions
• The Lawyer says “Settle”
• The right thing to do
MCCCD is self-insured. After $250,000 the insurance company takes over. Insurance company may mandate settlement. Board must approve settlement over $10,000 and must go on the agenda. Board received quarterly updates on litigation.
Cases in which Maricopa has prevailed
Cases where judgment has been entered again Maricopa
Risk Management Staff Members Ruth Unks and Sara Meland came forward to describe the activity and initiatives pertaining to liability claims filed against the Maricopa Community College District. Examples of claims filed were:
• MCCCD employee driving a golf cart struck a parked car
• Employee driving an MCCCD vehicle ran a red light and collided with an oncoming vehicle
• Slip, trip and fall accident caused by a cracked sidewalk
• Inappropriate use of license/copyright materials
• Civil rights violation
According to Arizona Revised Statutes Section 12-821, the process for filing a claim is as follows:
A notice of claim must:
• be filed within 180 days of the cause of action
• be filed with the person authorized to accept service (the General Counsel)
• contain sufficient facts to understand the basis of liability
• contain a sum certain for which the claim may be settled
Per Arizona Revised Statutes Section 12-821:
• a notice of claim must be timely filed before taking legal action
• legal action must be brought within one year of cause of action
Certain cases which fall under Federal law may have different statutes of limitations.
Claims Management includes the following:
• Risk Management manages self-insurance claims
• We are self-insured up to $250,000; our insurance policies “kick in” after this threshold is reached
• Risk Management serves as the liaison between MCCCD and our insurers
Non-litigated Liability Claims:
• Risk Analyst investigates claim
• If liability is unclear, the claim is denied
• If liability is clear, settlement is attempted
• Settlement offer is made
• If accepted, claimant signs a full release
• If not accepted, claimant may litigate the claim
Checks and Balances:
• The Risk Analyst has authority to settle claims up to $3,000
• Settlements over $3,000 must also be approved by the Risk Manager
• Settlements over $6,000 require the additional approval of the General Counsel
• Settlements over $10,000 require Governing Board approval
Claims: Approved/Denied (Non-litigated Only)
In 2007, 24 claims were filed:
• 10 claims (42%) were approved
• 14 claims (58%) were denied
Of approved claims:
• $92,426.24 was demanded
• $21,851.75 was paid
(23.6% of amount demanded)
Subrogation: Risk Management aggressively pursues its rights as a third party claimant. In 2007, through subrogation efforts we recouped $91,931.67.
• We do what we can to reduce risk and prevent potential liability claims
• Administrative Regulations
– Motor Vehicle Usage
– Workplace Violence Prevention
• Maricopa Integrated Risk Assessment (MIRA)
– Risk Assessment Training
– Risk Assessment Tools
– Risk Assessment Teams (CRAFTS)
• Safety Programs
– Driver Training, including Motor Vehicle Records checks
– Safety Training through EOLT
– Crisis Management
– Emergency Response Teams
– Requiring Certificates of Insurance
– Student Insurance Program
– Indemnification Contract Review
– Assumption of Risk Forms
– Routine maintenance and inspection of grounds, buildings and equipment
Business Law and Contracts
Maggie McConnell spoke about “the universe of potential problems”:
• The number of contracts that MCCCD enters into annually is large.
• In calendar year 2007:
– Legal reviewed and signed 2,058 contracts.
– Purchasing issued 62 formal procurements (that is, those for $50,000 or more) that resulted in additional contracts.
A ten-year summary of contract settlements included:
• In the last 10 years, there have been only three settlements to avoid threatened or pending litigation.
– In only one instance did MCCCD have to pay anything under the settlement.
– In two instances, MCCCD actually was paid as a result of the settlement.
Board Accountability Policies:
• Contracts exceeding $1,000 must be reviewed by legal counsel.
• Chancellor must inform the board of contractual losses or potential losses $100,000.
• The Vice Chancellor for Business Services is the only MCCCD employee authorized to sign contracts.
Legal Department Accountability Actions:
• Administrative Regulations
– Legal and Finance Departments completely rewrote the Official Functions regulation to tighten
down on certain types of expenses and to require greater documentation of them.
– Legal Department toughened the language of the Facilities Use regulation as part of the Blue Ribbon Committee recommendations.
– Legal Department regularly provides 1-hour training on contracts, official functions, and related issues as part of MCCCD core supervisor education.
– Legal Department makes presentations at faculty dialogue days on copyright issues.
– Legal Services website contains a wealth of information on best practices such as decision tools, contract and license templates, and summaries of ethics laws.
• RAIS v. SRT Benefits and Insurance Services Corporation (1998)
– SRT managed MCCCD’s worker’s compensation under a contract with MCCCD.
– RAIS sued SRT seeking a commission relating to the purchase of excess insurance for MCCCD.
– SRT brought MCCCD into the suit stating that it held $9,000 of MCCCD’s money.
• RAIS v. SRT Benefits and Insurance Services Corporation (1998)(cont.)
– MCCCD sought a dismissal of the lawsuit, and return of $9,000 from SRT.
– The court denied MCCCD’s dismissal request.
– MCCCD settled with SRT and received $4,877 under the settlement.
• Claims of Cohen Contracting, Inc. and Federal Insurance Company (2001)
– In 1997 and 1998, MCCCD awarded 5 contracts to Cohen for large construction projects totaling about $33 million.
– Cohen fell behind in 4 out of 5 of the projects and its bonding company, Federal, was brought in to complete the work.
• Claims of Cohen Contracting, Inc. and Federal Insurance Company (2001)(cont.)
– MCCCD claimed significant damages as a result of Cohen’s delays and poor performance.
– In 1999, Federal filed a notice of claim against MCCCD for $4.5 million.
– In 2001, MCCCD, Federal and Cohen settled and Federal paid MCCCD $1.2 million in damages.
• Superior Edge v. MCCCD
– Dispute centered over a software license and maintenance agreement signed in 2000 under which MCCCD had a perpetual license.
– In 2003, the parties extended the contract through 2006, with MCCCD paying on average $30,000-$40,000 annually.
– In June 2006, Superior Edge advised that renewal would be for three years at a price of $2.7 million and MCCCD declined to extend it.
• Superior Edge v. MCCCD (2007)(cont.)
– Superior Edge filed a claim against MCCCD seeking in excess of $15 million which MCCCD denied.
– Superior Edge filed suit in October 2006 in Minnesota alleging intellectual property and contract breach causes of action.
– MCCCD successfully had the case removed to Arizona federal court.
– In November 2007, MCCCD settled the lawsuit for $250,000.
• Over the 10-year period, settlements relating to contracts have resulted in MCCCD paying out $250,000 (Superior Edge) and being paid $1.2 million (Cohen and SRT).
• Net income from contract settlements over that period is about $980,000.
Employment Law Attorney Richard Galvan spoke about legal matters that he typically handles. These included:
– Employment law matters
(e.g. discrimination charges, whistleblower complaints, etc.)
– Student rights
Investigate and respond to charges of discrimination filed
with the EEOC and/or ACRD
Investigate and respond to complaints filed with the FLSA
Investigate whistleblower complaints
• Represent the District at termination or suspension hearings
• Respond to legal questions
from administration regarding above matter
• Present seminars to District employees on employment related matters (e.g. sexual harassment)
• Monitor litigation regarding
With reference to Student Rights, his area:
• Investigate and respond to OCR complaints regarding ADA and Title IX
• Present seminars to District employees (e.g. regarding FERPA)
Other projects include:
Special projects as assigned by Chancellor and/or General Counsel
Settlement of Legal Matters:
• After detailed investigation and response, most matters are found to have no merit and thus do not become matters to be settled
• Where liability may be at issue, cost-benefit analysis applied (e.g. cost of litigation vs. cost of settlement which would include general release)
• This analysis applies in the vast majority of cases where liability genuinely at issue
• Best to settle a bad case as early as possible (e.g. charge stage)
• Panel attorney fees range from $150 to $250 an hour
Concluding remarks by Mr. Kushibab included:
• A few cases involve important issues which must be litigated regardless of cost
• It is a misconception that all settlements are done in secret, outside of public view.
• Decisions are made in public. Strategies made in private.
• We are proactive in order to minimize litigation. Proactive measures include employment background checks, the Blue Book, In Brief, information security
Human Resource Overview
Vice Chancellor of Human Resources provided introductory remarks regarding Human Resources at MCCCD. This included the following information:
MCCCD is a large district and consists of
+ 4,500 FT Employees
+ 7,000 PT Employees
+ 10 Colleges
+ 2 Skill Centers
+ District Office
HR takes care of employees from beginning to retirement -- “womb to tomb.”
The focus is on customer service and being proactive with regard to Employment and Recruitment, Employee and Organizational Development, Employee Relations, and
Equal Employment Opportunity
He reminded everyone that employee litigation and workplace conflict is inevitable.
Employment & Recruitment – Dr. Christine Hall
Dr. Hall reported that each year over 26,000 applications are received in an effort to hire approximately 600 employees each year. The employment process is consistent in that all postings have similar information, forms are standardized, deadlines are adhered to, and committee composition must be diverse. Screening and interview procedures are also standardized. Salaries are based on guidelines of years of experience and education. She concluded with the compelling thought: Many have stated the need to have our faculty and staff "reflect our community". How do we accomplish this without using race and gender as a factor in the hiring process?
Employee & Organizational Development – Sherrie Faulkner
Ms. Faulkner spoke about learning programs available to minimize legal challenges. These include:
- Hiring The Best! For Maricopa MCCCD
- Mandatory Training Online Courses
- Navigate Maricopa Supervisory Development Program
She posed the following questions/thoughts pertaining to training:
- How do you take a learning opportunity and transfer it to employees?
- What are themes that the law says we have to do?
- Focus is on cultural aspect: vision, mission, values
- Best practices in Hiring the Best (required for faculty group only) – only 15% have taken this training.
- Mosaic Training – 64 hour session. Out of 4,500 employees, only 3% have completed. Out of 500 supervisors only 8% have completed.
Employee Relations – Judy Castellanos
Ms. Castellanos commented that it was important to manage employee performance and strategies to minimize legal challenges. She indicated that she oversaw the following functions in Human Resources: Policy Manual Administration, Customized Employee Training, and Consultative Employee Relations Services. She emphasized the importance of clear, concise documentation and the importance of defining what deficiencies employees had. The answers to who, what, when, and where were important when employees are not performing and that corrective action has to be factual. Their department reviews every evaluation that is submitted to ensure it complies with the law. She concluded with the compelling thought: With all the services that we provide, we’re still seeing that Employee Relations is not included in the process until the 11th hour. What additional strategies can Employee Relations use to become involved in personnel issues before they reach a formalized process?
Equal Employment Opportunity Office – June Fessenden
Ms. Fessenden indicated that it was important to minimize danger, keep complaints in house and minimize conflict. Her analysis of the past two year’s activity in this area of HR has shown that complaints involve retaliation, race and ethnicity, and sexuality and gender. Four main issues include relationships, hostile work environment, unequal workload, and verbal abuse. In 2006 there were twelve charges received by EEOC and in 2007 there were thirty-four. Only a small number were received in-house. MCCCD’s EEOC should be viewed as a resource. She concluded with the compelling thought: Historically, the Equal Employment Office is perceived as an agent of the employer. Employees may feel that their only recourse is to go externally when internal resources are available. How can we engage a system of early identification of employee issues at the ‘user’ level before they explode into internal and/or external discrimination complaints?
The evening concluded with table discussions centered on the compelling questions cited by the aforementioned presenters. Report outs followed.
The meeting concluded at 8:05 p.m.
Governing Board Secretary