Fired city manager in Merced County might get his job back — plus a $1.8 million payout

A former Los Banos city manager who was fired in 2022 after just nine months in the role may win his job back, along with a $1.8 million payout, new job protections and a raise that would provide a salary far higher than city managers of other small cities in the San Joaquin Valley.

The Los Banos City Council will vote Wednesday whether to reinstate Josh Pinheiro and thus block his threat of legal action, even though he has yet to file a lawsuit, according to items on the council’s agenda.

Last year, the council voted 3-2 in closed session to terminate Pinheiro’s “at will employment with the City without cause pursuant to his employment agreement,” according to minutes of the June 15 meeting. Two of the members who voted to oust Pinheiro have since left the council.

After his firing, an attorney representing Pinheiro “made a demand” of the city alleging wrongful termination and retaliation, according to the staff report for Wednesday’s city council agenda. However, neither Pinheiro nor his attorney ever filed a lawsuit, according to court records.

Pinheiro did not respond to voice messages left for him seeking his comment.

Even without a lawsuit being filed, city officials negotiated a settlement agreement with Pinheiro’s attorney, according to documents and statements from council members. As part of the deal, Pinheiro would agree not to sue the city, current and former council members or employees in connection with his first stint as city manager.

Speaking with the Central Valley Journalism Collaborative on Tuesday, Councilmember Brett Jones, who voted against firing Pinheiro, called the termination “unjust.”

The settlement price tag is worth it, Jones said, to win back a dedicated city manager, who, unlike “a typical government employee” doesn’t see the Los Banos job “as a stepping stone.” He hopes the 36-year-old Pinheiro will train up a successor who will stay at the job long-term.

“In my opinion, the $1.8 million is small in comparison to the opportunity cost we’ve given up over the last nine months without a committed city manager,” Jones said in a phone interview.

“What’s amazing is the average person would take the $1.8 million and move on and not want to come back. In my opinion, I think he’s doing the city a big favor,” Jones said.

Contract under consideration

The proposed four-year employment agreement would provide Pinheiro a $215,000 base salary with annual increases of 4%. The salary would surpass that of city managers in larger cities nearby. Los Banos has a population of just over 46,000 people, according to Census figures.

The city manager of Merced, which is Merced County’s largest city with close to 86,000 people, earned a base salary of just under $215,000, according to her 2020 contract.

Pinheiro, who received a relocation payment of $2,500 under his original contract in 2021 would receive another one-time moving and relocation payment of $5,000 under the new deal. It also includes standard benefits for health care, life insurance and retirement plus a $500 per month car allowance and $100 per month cellphone allowance.

Under the employment contract, Pinheiro’s at-will employment could only be terminated by a unanimous city council vote, rather than by a simple majority vote as in 2021.

“We want to make sure what happened on June 15 never happens again,” Jones said.

Pinheiro hired a San Francisco-based employment law firm, Avloni Law, to negotiate the settlement agreement. The law firm’s website says it specializes in sexual harassment and discrimination cases.

Both Jones and Lambert said when settlement negotiations began, Pinheiro was pushing for much more money.

Lambert said he plans to cast a “yes” vote for Pinheiro’s contract and settlement.

“It’s time to take the bull by the horns and move forward,” Lambert said.

Pinheiro’s qualifications for city manager remain unclear. Jones and Lambert described him as a “businessman.”

Lambert said Pinheiro has experience working for companies such as Amazon and Tesla without offering specifics. Pinheiro did not appear to have a profile posted to the professional social site LinkedIn and no other information about his background was immediately available.

None of the three councilmembers who voted to terminate Pinheiro’s contract agreed to comment about his firing or the new agreement. Deborah Lewis, who continues to serve on the council, declined to comment on Tuesday. Former Mayor Tom Faria and former Councilmember Refugio Llamas did not return messages left for them.