St. Johnsbury Settles Lawsuit By Ousted Town Manager, Hires Another One

May 18, 2015

The long legal battle between St. Johnsbury and former Town Manager Ralph Nelson is finally over.

Nelson left an administrative job in Major League Baseball to become Town Manager of St. Johnsbury in 2010. About two years later, a newly elected select board sent him packing without, he says,  explaining why. 

Nelson sued the town for wrongful termination.  He lost in Superior Court, but won a reversal in Vermont  Supreme Court. Last week, Nelson agreed to settle the case for $175,000 — more than twice his old salary. Both Nelson and the town say they were prepared to go to trial. But Nelson says he decided to settle in part because he considers the Vermont Supreme Court ruling the victory he had been seeking, as a matter of principle.

“I felt that we had really made the point … and it’s interesting, because well over a hundred years of statute had been written and nobody had ever challenged it. And the reason nobody had ever challenged it, I think, is because terminated town managers did not have the resources or the energy to take it all the way through…and once we did, we clarified the statute,” Nelson said.

The statute says, in part, “the town manager is subject to the direction and supervision of the board of select men, holds office at the will of selectmen who by majority can remove him at any time for cause.”

In reaching its opinion, the state Supreme Court had to reconcile two apparently contradictory terms: “at will” and “for cause.” The town argued that it has the right to remove managers “at will,” and in August 2013 Superior Court Judge Mary Teachout essentially agreed with that interpretation.

But on appeal, writing for the majority, Associate Justice John Dooley reasoned that a select board must show cause for removing a manager at will. “We reverse the trial court’s grant of summary judgment to the town and hold that [the statute] requires cause for removal of town managers,” Dooley wrote.

The high court also found that the select board’s public statement about Nelson’s removal “did not specify what actions were against the will of the selectboard,” and they returned the case to Superior Court, where it would have been heard if the settlement had not been reached.

Nelson says he had expected his legacy to be economic  improvements in downtown St. Johnsbury.

“But as it turns out in reflection my legacy was to clarify a statute that I think will protect town managers for a long time,” he said following the settlement.

The case is likely to make other towns think carefully about how they hire and fire their top employees. Town managers in Vermont, are defined differently from town administrators. Managers are presumed to have more autonomy from the select board — something Nelson says he was promised, but never got.

St. Johnsbury’s select board chair Kevin Oddy was on the board that fired Nelson, and still stands by that decision, but says the settlement allows the town to move forward without any more expensive litigation.  

A new town manager has just been hired. He is Chad Whitehead, a local engineer who has never held municipal office. The select board says they are looking forward to working closely with him.