Can a town council grant a multiyear employment contract that extends beyond the terms of a majority of its members? That question is the subject of a lawsuit reported today in the Gary Post-Tribune:
MERRILLVILLE — Lake Superior Court Judge Robert Pete is expected to render a decision soon on whether the town’s two-year, nine-month contract with ex-Police Chief John Shelhart is valid. * * *Posted by Marcia Oddi at October 30, 2004 02:55 PMAt issue is whether a council can grant a multiyear employment contract that extends beyond the terms of a majority of its members. In March 2003, five of seven council members who hired Shelhart lost their seats. New members fired Shelhart as chief and mounted a legal challenge questioning the validity of the old contract. They are refusing to pay Shelhart the $125,000 his contract stipulates.
[Attorney David Westland, counsel for Shelhart] emphasized that he doesn’t dispute that Shelhart can be fired by a new council, but he said that council should follow the provisions of the contract and pay Shelhart $125,000 in severance pay. He cited cases of precedent where school boards issued contracts with superintendents that extended “way beyond” the terms of sitting board members.
Westland said that’s because such contracts are made between the employee and the entity itself, not distinct members of the entity. Like a school board, Westland argued, the council is a governing body of officials elected to four-year terms. He said the council already has a practice of giving lengthy service contracts to agencies like the Lake County Solid Waste District. They’ve run through multiple terms of shifting councils, he argued.
[Attorney Steve Bower, the town’s representative] countered that a service contract is different from an employment contract. He downplayed Westland’s school board parallel, saying the police chief’s position was more like a town-hired attorney than a superintendent.
Bower cited an Indiana case where a court ruled that municipal officials could not contract with an attorney beyond their seated terms. He said much like attorneys, police chiefs share a confidential relationship with elected officials and therefore must serve at the officials’ discretion.
“An old council cannot bind a future council. It runs counter to the discretion given by the state,” Bower told Pete. Bower said the council members who issued Shelhart’s contract had no assurance they would retain their seats and unfairly made decisions that would affect the town past their elected terms. Bower said the right of new members to choose upper-ranking policymakers and staff was taken away.
Westland said no power to terminate and choose has been limited. He said it might not have been politically wise for the 2003 council to grant the long contract to Shelhart, but said that wasn’t a matter for the court to rectify. He said voters punish unwise elected officials. Westland said with a long contract, an employee agrees to a lower salary in exchange for stability.
Bower asked the judge to consider a recent New Chicago decision where Lake Superior Judge Gerald Svetanoff ruled that 2003’s outgoing New Chicago Town Council members could not deprive the 2004 incoming council of its power to appoint department heads. Westland contended Merrillville leaders were technically not lame-duck since no primaries or elections had been held when the contract was issued. “They were not clairvoyant ... They didn’t know they weren’t going to be there for Shelhart’s term,” Westland said.
Bower said if the judge rules that the contract is invalid, the litigation with Shelhart is over. But if the contract is ruled valid, litigation would continue on particular clauses.