N.C. Health and Human Services Secretary’s Aldona Wos’ decision to give $37,227 in severance to a staffer who spent a month on the job was classified as a court settlement in state payroll data, though no lawsuit was ever filed.
Thomas L. Adams, of Southern Pines, served as Wos’ chief of staff for the month of March before leaving the $155,000-a-year job. On April 1, Wos signed a “severance agreement” which sent $37,227.35 of taxpayer money to Adams, which came in addition to the salary he was paid for his month of work.
The state payroll system, known as BEACON, classified the payment as a “court settlement,” though no lawsuit was filed against the agency. Kevin Howell, an attorney who handles public records for the agency, confirmed Monday that there was not any litigation connected to the severance payment.
N.C. Policy Watch first reported the taxpayer-funded payment to Adams on Friday afternoon, after the N.C. Office of the State Controller released records detailing the settlement. DHHS released a copy of the six-page severance agreement shortly after the article was published, in response to a Sept. 12 public records request asking for details about the severance.
The agency has refused to provide a copy of Adams’ job description, the original terms of his hiring or any other records referring to the settlement, citing state personnel laws that shield some documents from public scrutiny.
Adams has not returned phone calls seeking comment, nor has DHHS responded to questions about the settlement. Ricky Diaz, the agency’s spokesperson, told other media outlets that personnel rules prevented the agency from commenting about the severance payment.
Adams joined DHHS on March 1, and his job announcement in a March agency newsletter said he had extensive high level management experience in state and national professional associations including the Medical Group Management Association, Association of Clinical Research Professionals and the American Society of Plastic Surgeons.
Records at the N.C. Secretary of State’s office show that before and after his month-long employment at DHHS, Adams was a lobbyist and director of the N.C. Captive Insurance Association, which successfully worked to pass legislation this year allowing the business-oriented insurance to be offered in North Carolina.
Adams’ bonus pay comes as the state agency and Wos have faced fierce criticism over the relevant work experience and amounts paid to several members of Wos’ leadership team.
In mid-August, N.C. Policy Watch reported that two 24-year-old former McCrory campaign staffers took top positions at DHHS, a 17,000-employee agency that manages the state’s Medicaid system. Matt McKillip makes $87,500 as Wos’ senior policy adviser and Diaz makes $85,000 as her communications director. The News & Observer reported in early September that Joe Hauck, an executive at the company owned by Wos’ husband, has been $228,000 in eight months working as Wos’ at the state agency.
Wos’ Medicaid director, Carol Steckel, also announced her resignation Monday less than nine months after she took the job running the massive system that provides health care for the state’s Medicaid population. Steckel plans on taking a job with a managed care company in Florida.
The justification for the $37,227 payout, and Wos’ reasoning in granting the payment, is far from clear.
It is referred to as a severance in an April 1 “severance agreement “ signed by Wos and Adams and stated that the money was paid because Adams expected six months of employment and “Adams and the DHHS mutually desire to end the Employment Relationship.”
The agreement (click here to read) also says the settlement is in response to disputed claims, though the nature of those claims is not revealed.
In a July 29 letter Wos wrote to McCrory budget director Art Pope, she backs away calling the payment a severance.
“In exchange for Mr. Adams’ agreement to waive all appeal rights and release the Department and its officials and employees from any liability or responsibility, the Department agreed to pay Mr. Adams the total sum of $37,227.35, less applicable taxes and other require withholdings,” Wos wrote in the letter to Pope. “This payment is not considered ‘severance.’”
Pope approved the payment, and wrote “Ok to process” on Wos’ letter on July 30.
The money was sent to Adams on Aug. 1.
House Democratic Leader state Rep. Larry Hall, of Durham, said he’s concerned about a month state employee in an exempt position receiving a severance payment, especially a payment that tops the $30,800 that most North Carolina teachers make in their first year of teaching.
“We need to have transparency and disclosure as they spend the people’s money,” Hall said. “I don’t see any benefit to doing business this way.”
Hall said Democratic lawmakers hope to question Wos about the unusual severance and several other high-salary hires at her agency at an Oct. 8 all-day legislative hearing with the agency. Other topics at the meeting led by Republican lawmakers will likely include DHHS’ switch to a new technology system for food stamp dispersal and Medicaid payments, which have resulted in people waiting months for the emergency food vouchers and long payment delays to medical providers treating Medicaid patients.
No severance for political appointments
The state personnel act offers routine state employees some protections from indiscriminate firings, but those same protections don’t extend to the top-level policy and administration jobs in politically-appointed jobs, like the one Adams served in.
Because the position Adams served in is exempt from state personnel law, taxpayers should not have been obligated to pay him a parting bonus at the end of the employment, said Tom Harris, general counsel for the State Employees Association of North Carolina. Harris also previously worked for 14 years, as an exempt employee, as the head of the wage and hour division in the N.C. Labor Department.
An exception would be if Adams had legitimate claim of discrimination based on race, gender or other protected classes and the agency wanted to avoid a lawsuit, Harris said.
“There is precedent when people get discharged and they file claims,” Harris said. “They do reach settlements but those settlements are not severance like they’re trying to make this look like this.”
Questions? Comments? You can reach reporter Sarah Ovaska at (919) 861-1463 or [email protected].