Former CEO seeks nearly $600,000

The former CEO of Memorial Hospital of Sweetwater County is suing the hospital and its board of trustees claiming he did not resign, but was terminated under an unlawful board.

Gerald Klein filed the complaint in the Third District Court of Judge Richard Lavery on March 31.

According to the complaint, on or about Feb. 7 or Feb. 9, 2017, the MHSC “without a lawfully constituted board, claims to have terminated Mr. Klein’s contract and voided the severance package it contains.”

On March 21, 2017, Klein served a notice of claim to the interim CEO Irene Richardson.

According to the notice of claim, Klein filed against the MHSC and its board of trustees, Klein started working for the MHSC on Aug. 8, 2013, as the CEO and entered into a contract with the hospital.

On Feb. 7, 2017, the MHSC Board of Trustees was suddenly reduced from a seven-member board to a two-person board. Klein claims the minimum number required on that board according to W.S. 18-8-804 (a) is five. The two remaining members of the board were Richard Mathey and Taylor Jones. Klein claims Barbara Sodowa was then appointed to the board, but wasn’t sworn in prior to attending an executive session on Feb. 7, 2017.

After this executive session, the board of three reconvened in an open session and announced that the board was going to accept Klein’s resignation but without the conditions attached to it. This includes the severance package.

Mathey, Jones and Sodowa met with Klein later that day to tell him they accepted his resignation, at which time Klein told them he had not resigned and they will need to talk to his attorney about it. He told them he assumed their intentions were for him to leave and they gave him an affirmation on that. He vacated his office the next day.

Klein claims he didn’t resign and the three board members are intending to stick with this fictional story.

The complaint states no notice of termination has ever been given to Klein and Klein did not resign. Even though the board publicly stated he resigned, he claims he did not. Since Klein claims he was neither terminated nor did he resign, he is entitled to his salary and benefits as a hospital employee in the amount of $595,518.15.

Another document filed as an exhibit in the court was the CEO employment agreement between Klein and the MHSC. Under the termination portion of the agreement, it states the board may terminate the CEO at its discretion. “Such action will require a majority vote of the entire board and become effective upon written notice to the CEO or at such later time as may be specified in said notice. After such termination, the hospital will continue to pay the CEO’s then monthly base salary for the month in which his duties were terminated and for 18 consecutive months thereafter as an agreed upon severance payment.”

The CEO contract agreement goes on to state “The severance arrangement described in this paragraph will not be payable in the event that the CEO’s employment is terminated due to the fact that the CEO has been charged with any felony criminal offense or any misdemeanor criminal offense related to substance abuse, healthcare fraud or abuse, violent crimes, sexual misconduct, crimes involving children or the operation of the hospital or has been excluded from Medicare, Medicaid, or any other Federal Healthcare Program.”

Klein is asking the court to rule in his favor and award him at least $595,518.15, which is the amount of the 18-months severance pay he believes he is entitled to and any other compensation the court deems appropriate.