News : N.D. ATTORNEY GENERAL WILL NOT OPINE ON BLUNT SEVERANCE
By:
November 14, 2008
The Honorable Robert R. Peterson
State Auditor
600 East Boulevard Avenue
Bismarck, ND 58505
Dear Mr. Peterson:
Thank you for your September 22, 2008, request for an Attorney General’s opinion. You indicate in your request that during your audit follow-up work on Workforce Safety and Insurance ("WSI"), you discovered facts which lead you to question the legality of WSI’s severance payment to Sandy Blunt, WSI’s former executive director. On December 6, 2007, WSI’s Board met and discussed its employment relationship with
Mr. Blunt, who had previously been placed on paid administrative leave.1 Then Chairman Robert Indvik stated that it had become evident that Mr. Blunt was no longer effective in his role as executive director and CEO. The Board discussed the legal requirements of a separation agreement with its attorney and subsequently voted to offer Mr. Blunt a separation agreement, including nine months of salary and benefits totaling $127,847.90.
WSI and Mr. Blunt subsequently entered into an agreement dated December 21, 2007, whereby Mr. Blunt agreed to resign from his position effective December 6, 2007. The agreement states that it constitutes the entire agreement between the parties and fully supersedes any and all prior agreements or understandings between the parties pertaining to the subject matter of the agreement. With your letter you provided an e-mail from Mr. Blunt to WSI dated August 11, 2008, wherein Mr. Blunt states he verbally tendered his resignation to Chair Indvik, and you surmise that this occurred prior to WSI’s full Board meeting on December 6. In response to questions from your office, Vice Chair Mark Gjovig recalled meeting with Mr. Blunt prior to the full Board meeting, but Mr. Gjovig did not recall whether Mr. Blunt resigned prior to the full Board meeting.
You state that "[i]f, in fact the former Executive Director did resign prior to the Board meeting, it would appear no severance pay could be provided to him under provisions within NDCC Section 54-14-04.3 . . . ." You question whether the $127,847.90 payment
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1 The separation agreement between WSI and Mr. Blunt was added to the agenda at the beginning of the December 6, 2007, meeting. WSI Board Meeting Minutes (Dec. 6, 2007).
The Honorable Robert R. Peterson
November 14, 2008
Page 2
is in compliance with state law requirements related to severance pay. If it is true that Mr. Blunt had resigned prior to the full Board meeting, and the Board had accepted his resignation, the cited section would have precluded the severance payment.
Under N.D.C.C. § 54-12-01(6) and (8), I am authorized to issue opinions to state agencies and legislators on legal questions. The long-standing policy of this office has been to decline to issue opinions on questions of fact.2 There is no dispute that WSI and Mr. Blunt entered into a contract stating that Mr. Blunt resigned on December 6, 2007. And, it is clear that the express terms of he contract provide that the terms thereof supersede any and all prior agreements or understandings between the parties.
Although you raise the possibility that Mr. Blunt may have resigned prior to the December 6 meeting, the resolution of that question would require a factual determination that is beyond the scope of legal opinions that can be offered by this office.
You further question whether the severance payment to Mr. Blunt satisfied the legal requirements for severance pay by increasing agency efficiencies or reducing expenses. I have reviewed the separation and release agreement between WSI and Mr. Blunt, which contains at least two pages that discuss the possible claims against WSI that Mr. Blunt has released and waived. Although WSI paid Mr. Blunt a very large amount of money about which I expressed deep reservations at the time, it is for the WSI Board to determine in the exercise of its discretion whether the settlement with Mr. Blunt could reduce legal expenses through the release and waiver of potential claims. Again, however, any further analysis of this issue would require that I address a question of fact, which I cannot do.
Sincerely,
Wayne Stenehjem
Attorney General