North Myrtle Beach settling work discrimination claims. City paid others to avoid suits

North Myrtle Beach appears on the verge of settling a trio of discrimination lawsuits with former employees, but they won’t be alone if they receive payouts over their grievances.

Those three were among a group of at least 10 employees that city officials were concerned would file suits after they were fired during the COVID-19 pandemic, according to documents acquired by The Sun News through a Freedom of Information Act request.

Seven other former city employees terminated during 2020 were given payouts in exchange for signing agreements preventing them from suing the city or any of its officials and employees, the documents show.

The agreements would appear to be nondisclosure agreements, though city spokesman Donald Graham disputed that characterization. They’re officially labeled “Transition Resources and Release in Full Agreement.”

They share all the primary aspects of a nondisclosure agreement though, which include: identification of the parties, a description of what is deemed confidential, the scope of the confidentiality obligation, exclusions from the confidential treatment and terms of the agreement, according to Forbes.

The Sun News has also previously referred to these as NDAs without objection from city officials.

The city paid the seven a total of $29,230, in sums ranging from $3,051 to $6,577, according to the agreements. That money was paid as a “compromise of doubtful and disputed claims,” with the city not admitting any liability.

Each agreement, provided to The Sun News with names of the former employees redacted, notes that the parties agree their employment is ending due to a “reduction in force made necessary by an extreme need” to reduce costs because of the pandemic’s impact on the economy.

North Myrtle Beach furloughed nearly 200 full- and part-time employees beginning April 2020, officials announced at the time. The pandemic caused a revenue shortfall of about $4 million during its 2019-20 fiscal year, according to documents it submitted to court in response to the employee discrimination lawsuits.

Former employee discrimination complaints

The three former employees who filed the suits were similarly offered a “modest transition package” as part of their terminations, but they did not sign those agreements, the city wrote in court documents.

Documents filed Monday in each former employee’s federal court case indicate a settlement has been reached, but no terms are disclosed, and city spokesman Donald Graham told The Sun News Wednesday that neither side had signed any official settlement documents. Both parties have 60 days to petition the court to reopen the case if necessary.

Graham added the city does not discuss personnel matters.

Pamela Mullis, the attorney for the three former employees, all women, did not immediately respond Thursday to a request for an interview.

Carolina Garcia, Tracy Scola and Suzanne Hoffnagle each alleged various forms of discrimination based on factors including race, sex and religion that led to their terminations while on furlough. Garcia also alleged sexual harassment and retaliation for seeking full-time health benefits.

Hoffnagle, 72 at the time she was fired, was just 99 days away from retirement, her complaint states. The city responded that it had attempted to credit her with that service time to help her reach full retiree health benefits, but she didn’t respond to multiple messages from city officials trying to reach her about that while she was on furlough.

Use of nondisclosure agreements in government settings

The use of nondisclosure agreements or similar agreements with departing employees is not uncommon in recent years for North Myrtle Beach, The Sun News has found.

The city paid four other former employees that left since 2020 for non-pandemic reasons a total of $30,562 to sign similar agreements, documents show. The parties agreed to characterize those departures as resignations.

A fifth former employee that was retiring signed a nondisclosure agreement in exchange for continued health insurance eligibility.

That total of $59,792 paid as part of these agreements is more than the previous five years combined, when the city paid nine former employees during 2014-2019 about $46,000 total to sign nondisclosures, according to previous Sun News reporting. That previous reporting found that Conway had used four nondisclosure agreements and Surfside Beach used three, while all other local governments claimed not to use them.

Nine of the 12 agreements signed since 2020 included mention of South Carolina’s Age Discrimination in Employment Act typed in bold font as part of a description of future claims the employee would be forgoing by signing.

Graham said federal statute requires a waiver of a potential age discrimination claim must be highlighted in some fashion when presented to employees 40 years of age or older.

Avoiding lawsuits

A city spokesman previously told The Sun News that the city rarely offers nondisclosure settlement agreements to departing employees, but they are considered on a case-by-case basis in consideration of protecting taxpayers from the risk of future litigation.

North Myrtle Beach paid a total of about $162,000 to settle seven lawsuits since 2020, according to documents provided from the FOIA request. None were filed by former employees.

The city is currently facing a fourth employee discrimination lawsuit filed year that remains active with no reported settlement, court filings show. Longtime city mechanic Davis Livingston alleged he was fired after suffering a work injury, but city officials have responded that his dismissal was due to showing inappropriate photos to coworkers.