Borough Manager Bill Seward and Mayor Jan Hill. (Emily Files)

Borough Manager Bill Seward and Mayor Jan Hill at the December 2016 meeting where Seward was fired. (Emily Files)

The Haines Borough has reached a settlement with a former manager who accused the assembly of defamation, racial discrimination and violation of constitutional rights. The borough will pay Bill Seward $55,000 to drop any legal action against the municipality. The borough denies wrongdoing.

The assembly fired Seward for cause in a 4-2 vote during his six-month performance evaluation in December. Instead of going into executive session, the tense, three-hour meeting happened almost entirely in public, at Seward’s request.

Seward pointed to comments assembly members made during that meeting as defamatory. His lawyer, Isaac Zorea, says the termination may have also been racially-motivated and that Seward’s constitutional rights may have been violated.

The borough denies that any of those claims are valid.

Zorea says the racial discrimination claim comes from statements Assemblyman Tom Morphet made. Morphet said Seward’s shortcomings in diligence and judgment were ‘inherent traits.’ Seward is of Tlingit descent.

“Any statement that a person has problems that are innate to them as a person, that seems to harken to Jim Crow,” Zorea said. “It seemed very unusual to make that type of a statement.”

Zorea says he believes Morphet’s comments had a racial motivation, but he says Seward didn’t necessarily think so. Seward did not return a phone call for this story. Neither did Morphet.

Zorea says Seward was also held to an arbitrary standard. He says the reasons assembly members gave for termination were subjective and that it seemed to come down to politics. Seward was hired under one assembly and fired under another.

The settlement comes a couple months after Seward demanded severance pay and threatened a wrongful termination lawsuit. The assembly met two times in executive session to discuss the matter with the borough attorney.

Seward’s contract specified he would receive four months of prorated salary and benefits if he were fired without cause. Haines borough attorney Brooks Chandler says the overall cost to the borough if Seward had received severance pay is actually slightly more than the settlement: $55,500. After tax deductions, Seward would have taken away about $41,000, according to Chandler. That means the settlement is more money for Seward, but a marginally lower cost for the borough. Although that doesn’t include legal expenses accumulated during the settlement negotiations.

“When something is settled, the goal is always for both sides to be a little disappointed,” Zorea said. “So I don’t believe my client thinks that this was all he was entitled to, but it was prudent for him to accept this offer, allow himself to move on with his life.”

Zorea says one reason they settled was because there would be ‘logistical problems’ proving ill intent by multiple assembly members.

A statement from Chandler says regardless of the validity of Seward’s claims, there are significant costs and risks to going to trial. Chandler said he evaluated those risks and talked with the assembly, who authorized him to negotiate a settlement.

Chandler says given that Seward’s claims against the borough were partly based on assembly comments, the borough does not intend to speak further on the settlement.

The Haines manager job was Seward’s first experience working in municipal government. He had a more than 20-year career in the Coast Guard.

Haines is now in the middle of hiring a new manager. There are two finalists for the position, both of whom are local. The assembly is scheduled to decide on the next manager at the end of this month.

This story has been updated to reflect the amount of compensation Seward would have received in severance pay if he were fired without cause. 

Full statement from Haines Borough:

   The Haines Borough and William Seward have reached a settlement which fully resolves all claims related to his termination.  The Borough will be paying Mr. Seward fifty-five thousand dollars.  In return, Mr. Seward will release the Borough.  Mr. Seward had asserted statements made during the termination constituted defamation of his character, that his termination was motivated by racial discrimination and that his constitutional rights had been violated.   The settlement agreement terms include the Borough’s denial any of the claims were valid.

Borough attorney Brooks Chandler stated: “Regardless of the validity of these claims there are always significant costs and risks associated with resolving employment disputes in a trial.  I evaluated those risks using my professional judgment, talked to the Assembly about the risks and costs of a lawsuit and proceeded to negotiate a settlement as authorized by the Assembly.   I firmly believe this settlement is in the best interests of Borough residents”.     Given that the initial claims of Mr. Seward were based in part on statements of members of the Borough Assembly, the Borough does not intend to comment further on this matter.