Volume 8, Issue 1 University of Houston
HRM prof wins whistleblower lawsuit against UH
University may appeal verdict, $305,000 award
By Ken Fountain
Special to Breaking News
A Harris County jury found Dec. 14 Conrad N. Hilton College of Hotel and Restaurant Management professor Stephen Barth was retaliated against for reporting possible criminal activity by the college's former dean.
Following five days of testimony, the 10-2 jury -- Texas civil trials do not require a unanimous verdict -- awarded Barth $305,000 in economic damages and attorneys' fees, finding the University in violation of the Texas Whistleblowers Act. The assistant Texas attorney general who led UH's defense indicated the University would appeal.
Barth filed suit in July 2001, alleging that when he relayed concerns of a former HRM business manager about financial improprieties by former HRM Dean Alan Stutts to UH officials, the dean began a campaign of retaliation against Barth.
Former business manager David Gilkeson told Barth in Spring 1999 that Stutts was falsifying purchase vouchers to pay for the services of a New York public relations firm not contracted through UH procurement policies as required by state law. Gilkeson told Barth that Stutts had made fund transfers, totaling $506,900, to and from an account of $5 million donated by the private Hilton Foundation for renovation of the University Hilton in order to cover deficits in HRM accounts not related to the renovations.
Allegations of retaliation
Barth, who is also a hospitality industry lawyer, alleged Stutts's retaliation took the form of arbitrarily low merit raises and denial of travel funds; alienating Barth from HRM faculty and students; and defaming him in a letter to other faculty, among other things.
During testimony that lasted nearly two days, Barth said his UH career had been largely successful since he started at the college in 1990. He said Stutts had supported Barth's initiatives and promotion to tenured status in 1997.
“We were good friends, actually,” Barth said of his relationship with Stutts.
Barth said when Gilkeson told him of his concerns about the public relations expenditures and the transfers of renovation funds, Barth advised him to contact Randy Harris, then UH's vice president for administrative affairs. Barth testified that, adhering to a UH policy requiring employees to report “suspected criminal activity,” he also spoke to Harris, who initiated an investigation by the UH Internal Audit Division and ordered the reversals of the renovation account transfers.
In July 2001, more than two years after Barth reported the information, the IA division released its report on the allegations. The report, authored by IA director Don Guyton, found the Stutts administration had violated UH internal policies and contracting requirements, but had not violated any criminal laws, based on input from state auditors.
Under questioning by J. Beverly, one of his lawyers, Barth testified when Stutts learned he had reported the matters to UH officials, the dean arbitrarily ranked him lower than other faculty on the evaluation criteria of research and “grantsmanship,” or bringing outside funds into the college. These artificially lowered rankings affected Barth's annual merit raises, the professor and a paid economics expert witness both testified.
Barth said Stutts also severely curtailed funds allowing him to travel to hospitality industry conferences and prevented him from teaching a popular introductory course at the college for the first time in years. The dean also withdrew his support of an annual hospitality law symposium Barth organized, causing the law firm that sponsored it to cancel its funding, Barth testified.
Assistant Texas Attorney General Peter Plotts and UH Assistant General Counsel Jose Rangel argued that Stutts' ranking of Barth on research and grantsmanship was consistent over the years; that Stutts properly exercised discretion when he denied Barth's requests for limited travel funds; and that the legal symposium was cancelled because it continued to lose money and attendance after three years.
Prof seeks 'intervention'from UH officials
Barth testified that, frustrated by the length of the IA investigation of the allegations, he contacted the UH Police Department after being told by Guyton that was his right under the Texas Whisteblowers Act, which protects state employees from retaliation for reporting suspected criminal activities.
Frank Cempa, a former UHPD assistant chief, testified that he and former UHPD Chief George Hess met with Barth in summer 2000 and initiated an investigation of the allegations. Shortly afterward, both Cempa and Hess left the University following a public flap involving the department's filing theft charges against a star UH football player with the Harris County District Attorney's Office. UH's attorneys declined to cross-examine Cempa.
Barth testified when he believed Stutts was retaliating against him, he sought protection from UH administrators, principally then-Provost Edward Sheridan. He said Sheridan continually rebuffed him, telling Barth his only recourse was to file a grievance with the University's grievance committee.
Barth testified he did file several grievances, based on several issues including the merit evaluations and loss of travel dollars. When the grievance committee ultimately ruled in Barth's favor on those issues, Sheridan found reasons not to uphold the committee's recommendations, despite his previous assurances that he would “take the necessary steps to intervene,” Barth testified.
Sheridan, now a University professor who spends much of the year in Florida, testified he did not “intervene” to protect Barth from Stutts' alleged retaliation because as provost, he was the final arbiter in the grievance process.
Sheridan also testified that he did not uphold the committee's recommendations favoring Barth because he determined the committee had erred in its conclusions, particularly on the matter of Stutts' respective merit evaluations of Barth and another HRM professor, Ron Nykiel.
Barth testified that during a meeting with Stutts and Sheridan in the provost's office concerning a stipend for Barth's chairing of HRM's academic council, Stutts whispered to him while Sheridan stepped away, “If you think this is retaliation, you just wait.”
Sheridan testified it was unlikely he would have left the meeting, during which Stutts lobbied for Barth to receive what Sheridan said was a highly unusual stipend for a committee chairman. Sheridan said he agreed that Barth should receive the stipend that year, but that would be the last year that anyone would receive it.
Defense questions Barth's motives
UH's attorneys also called Agnes DeFranco, a former HRM assistant dean under Stutts who is now the University's interim assistant vice president for undergraduate studies. DeFranco testified the reason Barth was not included in the development of the college's online instructional program -- one of his retaliation claims -- was that he delayed committing to it in time because of his concerns over ownership of course materials.
Clinton Rappole, an HRM emeritus professor, testified he had several encounters with Barth in which Barth was “strident, loud and in-your-face.” One of these encounters, he said, was a meeting to elect a new academic council chairman, during which Barth questioned the integrity of other faculty members and walked out.
In a phone conversation last summer, Rappole testified, Barth challenged recruitment by the college's current administration of a potential faculty member from the University of Nevada-Las Vegas. Rappole, who in 2002 underwent a heart bypass operation, said that Barth asked him, “This isn't very good for your heart, is it?”
Stutts resigned from his deanship and his tenured position at the University in December 2001 as a condition of a mediated divorce agreement with his former wife, College of Education professor Yali Zou.
Shortly afterward, Stutts took over as president of a for-profit education institute in Minneapolis. He is now president of Brown College, another private institution in Minnesota. While UH's attorneys expected to call him as a witness, they told Judge Patricia Hancock on the last day of the trial Stutts was unwilling to testify.
Verdict may be appealed
Following closing arguments, the eight-man, four-woman jury deliberated three hours before signaling their split verdict. Following the judge's lengthy jury charge, they found the University had retaliated against Barth for making a “good faith” report of suspected criminal activities to proper law enforcement authorities.
Immediately following the verdict, Barth told Breaking News he and his attorneys were pleased the jury “validated our position,” but that he was “saddened” by the meaning of the verdict.
“I hope that the University of Houston will take a more proactive approach in protecting people who come forward (to report alleged wrongdoing),” he said. Barth said he was “optimistic” that the University would do so.
During an after-verdict discussion with jurors, Assistant Attorney General Plotts said the University would likely appeal the verdict based on what he called errors of law by Hancock in her jury instructions.
Jury forewoman Nancy Boothe, an executive assistant for a homebuilding company and one of the two jurors who did not find for Barth, said that the deliberations were “reasonable,” and that the jury did a “good job” despite the split verdict. She said the dissenting jurors had an impact on the damages awarded Barth.
Madolyn Wright, a Houston Community College professor
and department head, said that she and the other jurors who ruled for Barth
felt he “did everything he could do (to address his complaints), but the
University took its time in responding.”