After a nearly two-year battle, the city of Palo Alto and its Children's Theatre managing director have settled a racial discrimination lawsuit for $55,000, according to an agreement released by the city attorney's office.
James "Judge" Luckey and the city signed the settlement on Nov. 27, which releases the city of all claims in exchange for the payment. Luckey's attorney, Andrew F. Pierce, a Redwood City employment attorney, was to accept the cash payment as a lump sum within 30 days of signing the agreement. In addition to the payment, Luckey is keeping his job, his attorney told the Weekly.
The settlement is the second that Luckey, who is black, and the city have entered into since 2012. In a previous dispute, he filed a complaint with the Equal Employment Opportunity Commission (EEOC) alleging that his then-supervisor, Greg Betts, discriminated against him on the basis of his race after performance-review issues.
Luckey was reprimanded and suspended in 2011 for five days for allegedly failing to comply with hiring policies such as fingerprinting requirements for children's safety, failure to adhere to his division's budget, inappropriate delegation of work and treatment of employees, according to the city's August 2018 court filing for summary judgment to dismiss the case.
In July 2012, he allegedly allowed a contractor with multiple convictions, including for prostitution, to work with children prior to receiving fingerprinting clearance. He was reprimanded and received a warning letter. His performance review that year alleged that he failed to respond in a timely manner to communications or to follow staff hiring procedures. Staff complained about inconsistent work schedules, inefficient operations and lack of direction, according to the court documents.
The city and Luckey reached a settlement agreement on Nov. 28, 2012, regarding those matters, which included revising the written warning on fingerprinting policy, completing an extra performance review for 2013, removing the 2011 disciplinary action from his personnel file and reducing his five-day suspension.
As part of that deal, he signed a broad release that discharges the city from any claims related to his employment "which he has or may have, whether known or unknown, suspected or unsuspected," which were raised or might have been raised or arise from in any manner related up to the date of the agreement.
Luckey again filed a complaint with the EEOC in September 2015 for race discrimination by the city and his new boss, Rhyena Halpern, then assistant director of community services and director of the arts and sciences division. The EEOC dismissed his complaint in September 2016 after the agency could not confirm the violations, according to a city filing to the city's court filing.
He then filed a lawsuit in Santa Clara County Superior Court on Dec. 8, 2016, claiming racial discrimination and retaliation by Halpern. The complaint alleged that Halpern, who became his supervisor in February 2013 and is white, took an immediate dislike to him and treated him differently than his Caucasian peers and staff because he is black.
Luckey alleged that she "systematically" failed to meet with him to set annual goals and a budget, which deprived him of approvals. She consistently met with white staff members, however, he claimed.
Halpern allegedly did not invite Luckey to one-on-one lunch meetings that she had with white staff. She also allegedly delayed and prevented him from receiving a pay raise from 2013 to 2014, although he had received high praise during assessments just before she became his supervisor, according to the complaint filed in Santa Clara County Superior Court.
White staff received 5 to 10 percent pay increases for work they did during the vacancy of the assistant director position, but Luckey did not receive his pay increase. His work duties, however, increased, according to court documents.
She also allegedly prevented him from recording his actual work hours on the city's payroll, requiring him to log out after eight hours a day and five days a week, which deprived him of pay and created the impression that he worked less than his colleagues, he claimed. That, in turn affected his being considered for promotions, transfers or compensation increases. The lawsuit asked for unspecified damages.
But the city argued that the case should be dismissed because many of Luckey's claims originate from 2009 and are barred by the 2012 settlement release. Most of his claims were also beyond the one-year statute of limitations, the city's contracted attorney Warren Metlitzky wrote.
Luckey's 2013 merit bonus was not delayed, and he was not denied a merit bonus in 2014, the city maintained. He has also admitted that he was not entitled to additional pay for working above his classification during the vacant assistant manager position, according to the city's court filing. It isn't an adverse action to require Luckey, like his peers, to seek manager approval when deviating from his assigned work schedule.
Halpern did not regularly schedule one-on-one meetings with arts and sciences managers, including white managers, the city argued. Having bi-weekly meetings rather than annual ones and delayed receipt of a few emails are not adverse actions, the city noted. It is likewise not illegal retaliation for a public entity to make budget cuts or to give annual performance reviews. Neither the department's revenue expectations nor Luckey's failure to receive the highest merit bonuses after lower personnel reviews for the years 2014 through 2016 were retaliatory, Metlitzky maintained.
When Halpern took over as Luckey's supervisor in 2012, she was informed that two employees had filed grievances against Luckey and there had been a Labor Department investigation into his conduct. Three organizational consultants were brought in to address the ongoing problems with the Children's Theatre.
The patterns of poor communication response and interaction by Luckey that preceded the 2012 settlement had continued in 2013, and although Halpern made note of these, she also noted ways where his performance was satisfactory. He ultimately received a rating of three, "successfully meets expectations" on his special-performance review required under the 2012 settlement and for his 2013 annual review. His 2014 performance review rated a two, "meets expectations." He received a 2.5 percent merit pay increase in 2013 and 1.5 percent increase in 2014.
He also received a 2 percent general increase and a 10 percent "in-range progression" increase as a result of a management total compensation study. All community services department senior program managers receive the same percentage increase at the same time, the city claimed. In 2015 and 2016, he received a performance rating of "successfully meets expectations," and merit and pay increases for both years.
Regarding alleged inappropriate comments by Halpern, Luckey did not raise any complaint with Betts regarding statements about his race that he now claimed Halpern had made when he complained to Betts in May 2014 about Halpern's general treatment of him and his staff, the city noted. He first raised the discrimination complaint, that the Children's Theatre was underfunded and he was underpaid two months later.
The city's Human Resources Department investigated the allegations and found they could not be substantiated. More than a year later, he filed his September complaint with EEOC.
"The only explicitly race-related conduct at issue are comments in which Halpern displayed sensitivity to Luckey's identity. Specifically, Luckey alleges Halpern asked him several times: 'How do you feel about being the only African-American in the department?'" the city wrote.
Luckey admitted that the question was asked in a professional manner and that he did not feel tense or heated. Halpern disputed that she asked the question more than once, but said she asked a similar question on occasion where issues of privilege and class were being discussed.
Under the current settlement, Luckey agreed to release the city from violations of the California Labor Code, the Employee Retirement Income Security Act of 1974 and other laws up to the date of the agreement. He also agreed to waive his rights to any claim of discrimination including under the Civil Rights Act of 1964, the California Fair Employment and Housing Act, and other laws pertaining to discrimination. But the release does not extend to claims that he didn't know or suspect to exist at the time of the release, which would have affected his settlement. Halpern, who has retired, was later dropped as a defendant because she could not be held personally liable as a supervisor under the Fair Employment and Housing Act. The city is paying for her legal fees under the settlement.
Luckey said in a phone message to the Weekly that he had no comment regarding the settlement.
"In January 2009 when I became the artistic director of the Children's Theatre, my professional goal was to have an impact on the lives of children, youth and families in this community and in the performing arts. In the past 10 years the Children's Theatre has experienced tremendous growth in participation, in audience attendance and revenue, and I am humbled and grateful to this community for the support extended to me privately and for their ongoing public support of Children's Theatre and the other performing arts programs managed by the dedicated staff I have the honor of leading," he said.
His attorney, Pierce, said he thinks his client is satisfied with the agreement. Despite the agreement's wording, Pierce said he is not collecting the whole $55,000 amount as payment for his services. The settlement hasn't been allocated yet, he added.
Pierce said this settlement worked out more positively than many cases he has seen as an employment attorney.
"I was impressed by how everybody was handling it in a mature, rational way. In my 30 years of practicing employment litigation, 90 percent of the time someone like Judge Luckey would've been forced out. Most of my clients, once they get into a dispute of this nature, are forced out. He's still doing his invaluable role at the Children's Theatre," he said.
He credited Luckey and the city manager for being able to work out the dispute through mediation.
"The management structure has changed. We're not concerned about anything else like this happening," he said.
Luckey joined the city as the theater's artistic director in January 2009 on the heels of the 2008 retirement of longtime director Pat Briggs. She had been the Children's Theatre director since 1961, but she became embroiled in a controversy after an administrative investigation found she had mishandled thousands of dollars.
The city launched the investigation after a criminal embezzlement inquiry, which came to light after a June 2007 burglary and initially fired Briggs in June 2008. She had first been placed on administrative leave in January 2008.
The Santa Clara County District Attorney's office found the investigation was too complex and flawed for a criminal prosecution. Briggs was allowed to retire in August 2008 as part of a settlement agreement with the city.
Luckey came with considerable theater experience and was welcomed as a new and hopeful change to sweep away the past ugliness and to put the Children's Theatre on positive footing.