On Sunday, September 22nd, parties representing both sides of the federal lawsuit Hardin v. Mendocino Coast District Hospital (MCDH), Bob Edwards (former MCDH Chief Executive Officer), Wade Sturgeon (former MCDH Chief Financial Officer), and Steve Lund (former President of MCDH's Board of Directors and current board member) attended a mediation in the San Diego area. At the conclusion of that ten hour session, the mediator drafted a memorandum of understanding (MOU) between the parties settling the lawsuit that had been ongoing for more than two years. Readers can examine the AVA online archives, dating back to at least January, 2017, to find the origins of the allegations of harassment and questionable billing practices brought by then Chief Human Resources Officer Ellen Hardin against MCDH, its top two administrators and the leader of the board of directors. Many other AVA articles subsequent to the beginning of 2017 also reference the Hardin case.
The amount of the settlement, though blacked out in court filings, is presumed to be in the neighborhood between $2.5 and $3 million dollars, with the most precise educated guess placed at $2.6 million. According to a recent filing made by Hardin's attorney, Paragraph 3. of the Sept. 22nd MOU states, “The Settlement Sum will be paid by check made payable to 'Ellen Hardin and the Trust Account of the Law Office of Twila S. White.' Appropriate IRS Forms 1099 shall be issued. Plaintiff reserves the option to structure all or a portion of the settlement proceeds into an annuity.”
At this point, the parties are squabbling about whether or not the payment will be made in one lump sum (MCDH's desired method) or doled out in smaller increments, presumably to make Ms. Hardin's tax hit less substantial. Other than that, the lawsuit is a done deal.
When a court case that has begun from extreme adversarial positions reaches a mutually agreed upon settlement, observers are still tempted to ask, 'so, who won?' Having been a negotiator for a nascent then fledgling union for several years in the 1980s and 1990s it is tempting to go off on a tangent about “Interest-Based Bargaining” (IBB) vs. “position-based bargaining, but let's leave that to anyone interested in more progressive methods of negotiation investigating those worthwhile topics on their own time.
The Hardin case result might best be called a win-lose-win situation. Receiving more than $2.5 million in a settlement ostensibly makes the former MCDH human resource officer the victor. Obviously, those forced to pay out must be labeled the losers.
However, let's look at Paragraph 1. of the MOU: “MCDH and/or its insurer, BETA Healthcare Group, a California joint powers agreement (hereinafter 'BETA') shall pay to Plaintiff the sum of ____________.” [presumably an amount near $2.6 million]
BETA is covering the coast hospital's losses in this matter up to about $4 million. That means that MCDH is not going to incur an actual monetary loss from its financially stressed coffers other than a possible insurance rate increase in the future.
The next question that may be on some readers' minds: Will this impact the potential affiliation with Adventist Health if the haggling over how Hardin's money is paid out lingers too long? The short answer: another type of mediator will decide whether the Hardin payment comes in one lump sum or not will occur before the year is out.
This takes us to another sticky situation that at this point is more supposition than actual hard fact. At recent town hall forums in which MCDH interim CEO Wayne Allen, Chief of Staff, Dr. William Miller, and board member John Redding have laid out what affiliation with Adventist Health (AH) will look like, there has been talk about a possible roll back of the public vote on affiliation to June, 2020. Up until this past week, the March 3, 2020 election day had been all but cast in stone for a public yea or nay on affiliation.
In addition to hints about the affiliation vote being pushed back to a later date, CEO Allen also has brought up the possibility of MCDH entering into a management contract with Adventist Health during the period leading up to a public vote on the matter. That would require approval of the MCDH Board of Directors then AH would send in its own team to essentially run the day to day operations of the coast hospital. One might think of it as a sort of exhibition season representing part of what AH is capable of providing after affiliation becomes official.
Of course, an AH management team would likely make some quick and potentially painful payroll cuts. In addition, rumor on the street would have it that the first thing to go at an AH run coast hospital would be the labor and delivery department. For those revving up indignation (righteous or otherwise) at that prospect, MCDH plans a November public forum on the future of labor and delivery on the coast. Precise date, time, and setting of such meeting is yet to be determined.
In the meantime, we can wait and see whether or not the voters of the Mendocino Coast Healthcare District have their say in March or later. Remember that the affiliation deal would first have to be approved by a truncated (three member) MCDH Board of Directors. To be clear about when a special election would occur, the June election mentioned at the affiliation forum is not an option. California election law has changed as of the first of the year in accordance with switching the Presidential primary to March. The first Tuesday after the first Monday in April is available for a special election as is a similar Tuesday in November, 2020. Making a rough guess, the cost to taxpayers of the Mendocino Coast Healthcare District for such a special election could be upwards of fifty to sixty thousand dollars. Of course, Adventist Health might be persuaded to foot that bill. A mail-in ballot procedure would be available in May, 2020, presumably at a reduced rate of expense.
The rumored reasoning behind a delay in the public vote involves hesitancy on the part of AH due to uncertainties created by their operational agreement with St. Joseph's Health to integrate clinical services. That agreement made more than a year and a half ago is still under review by the state attorney general's office for possible antitrust issues.
Where there is one rumor, you can pretty much count on a counter balancing alternative. That has the Adventists still full steam ahead in their desire to make affiliation with MCDH happen as soon as possible.
Full disclosure: This writer has the price of a decaf mocha riding on the outcome of whether or not the public vote occurs in March or later. So come and get me coppers, for betting not on the outcome of an election, but when said election takes place. Perhaps this is one of the signs of the apocalypse or a sign that I need a gamblers anonymous meeting.