WEST NEWBURY — Selectman Tom Atwood announced this week that he won't participate in a mediation session aimed at resolving a lawsuit filed against the town by its former finance director.
The announcement followed an executive session held at the end of the board's regular meeting on Wednesday night.
During the meeting, selectmen Bert Knowles and Dick Cushing voted against asking town counsel Michael McCarron to attend the mediation session that is slated for today at the Boston law firm, Shilepsky, Hartley, Robb, Casey, Michon, LLP.
The legal mediation is an attempt to resolve a $500,000 civil lawsuit filed against the town last July by Tracy Blais. The lawsuit claims selectmen defamed Blais, discriminated against her and failed to live up to her contract. Atwood and former selectmen Glenn Kemper and John McGrath are also named in the suit.
"To have selectmen meet for a legal matter and mediation without town counsel is poor, irresponsible decision-making and best defined as an egregious violation of the public's trust," Atwood said. "I will be attending with my attorney but will sit in a separate area of the law firm's offices and will not be in the room with the selectmen where executive session will be held."
But Knowles said the Massachusetts Interlocal Insurance Association is contractually obligated to represent the town in its indemnification of municipal employees. MIIA, which is responsible for the reimbursement of "all reasonable" attorney fees the town accrues from this type of lawsuit, has opted to use its own attorney.
The nonbinding mediation hearing does not require town counsel's presence, so the insurance company isn't going to cover any additional costs for McCarron to attend, Knowles said.
If a settlement is reached today, a costly court trial would be averted. But if the mediation does not result in a settlement, nothing discussed during mediation is admissible in court, the chairman said.
But Atwood argued that the insurance company will put its own interests first when discussing a settlement.
"Mike (McCarron) has been working on this issue since the beginning and has kept the town's interests prioritized," Atwood said. "The decision by Dick and Bert not to have town counsel present at these important legal discussions does not have the taxpayers' best interests in mind."
Knowles, however, disputed Atwood's interpretation, saying that the fact that his colleague on the board is named as a defendant in the case may account for why he is "putting his own spin on what is happening."
Cushing said he was dismayed that Wednesday night's executive session, held so selectmen could prepare for a "winning approach in mediation," ended as it did.
"Tom has been against meeting with the other side from the beginning, and his noninvolvement here makes me wonder about his unusual entry into politics three years ago," Cushing said.
Atwood beat Knowles for his seat in a stealth write-in campaign in 2009. Knowles regained a seat on the board last year by beating Kemper.
The split on the board is reflective of a larger schism in town following the 2009 election and a decision not to renew Blais' contract last spring.
" After several years, eight lawyers, and rising, uncertain fees, it's time for the town's past and present elected officials to do the right thing — perhaps save many tax dollars — and put a sad history to rest," Cushing said.
Knowles said whether mediation winds up saving tax dollars is yet to be seen, but he agreed "it's is a step toward putting this behind us."
After selectmen voted not to renew Blais' contract in February 2011, the 19-year veteran finance director took a job as town administrator in Newbury. She filed a nonpayment of wages and workplace complaint with the state attorney general's Fair Labor Division on April 4 and was granted approval to pursue the private civil action.
In June, Blais filed a discrimination charge with the Massachusetts Commission Against Discrimination alleging "unlawful retaliation" against her by Atwood, Kemper, McGrath and the town for a sexual harassment complaint she allegedly lodged against McGrath in 2007. Atwood described the lawsuit as "baseless" and vowed to vigorously fight it.
A forensic internal control review of the finance department conducted by Melanson Heath and Company met with controversy when it was kept private by selectmen for five months. Finally released last November, it identified deficiencies in how payroll was reconciled, cases of employee overpayment and underpayment, and the need for tighter internal controls.
Just before Thanksgiving, the state inspector general's office cleared Blais of allegations that she took inappropriate action that resulted in her receiving merit bonuses or more pay than she was contractually entitled to.
Blais has consistently denied any wrongdoing. Her lawsuit seeks damages suffered — including, but not limited to, loss of income, loss of professional opportunity, loss of personal and professional reputation, and emotional distress.