Two Oregon Department of Corrections employees have sued the state agency, alleging they were retaliated against after claiming top officials misled lawmakers and the agency misused grant funds.

Gina Raney-Eatherly and Merilee Nowak filed the tort lawsuit in Marion County Circuit Court in August, following more than a year of what they described in court documents as unlawful employment practices.

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The Oregon Department of Corrections filed a response last month, denying the lawsuit’s allegations.

The women stated that when they tried to correct a misleading report given to lawmakers, the Oregon Department of Corrections retaliated by demoting them and threatening layoffs.

Raney-Eatherly began working for the Oregon Department of Corrections in 1995. In 2016, she was recruited by the agency’s director and deputy director to serve as the administrator of the combined Office of Government Efficiencies and the Research Unit. Nowak had been working for the Department of Corrections since 2004 and transferred to that same combined office in 2018 due to her experience in data, strategic planning and business analysis, the lawsuit states.

According to the lawsuit, in January and February 2019, Department of Corrections communications manager Jennifer Black asked Raney-Eatherly and Nowak to review the agency director’s draft presentation to the Oregon Senate House Judiciary Committee on substance abuse treatment for inmates.

In reviewing the presentation, Raney-Eatherly and Nowak found it exaggerated the number of inmates with substance abuse issues, the lawsuit states. The two women, with assistance of another research analyst, then provided Black with corrected data and information. Black said she would discuss the issue with both the director and assistant director of the Department of Corrections, according to court documents.

“However, the incorrect and false information which misrepresented the need for substance abuse treatment in adults in custody was presented to the Senate House Judiciary Committee without any of the changes provided,” the lawsuit states.

In late March 2019, during a legislative hearing, late Sen. Jackie Winters asked then-Department of Corrections Assistant Director of Correctional Services Heidi Steward, whether prison agency treatment programs affected recidivism rates in inmates.

“We lack researchers in our Research Unit, and so I don’t get that data historically or on a regular basis,” Steward told Winters during the hearing, according to the lawsuit. Steward then told Winters that she would have the Department of Corrections research unit provide the data that Winters had requested.

“However, Ms. Steward stated she did not want this data provided to Sen. Winters, and instead planned to provide a written response describing DOC’s lack of sufficient resources to comply with the request,” the lawsuit states.

Steward was appointed deputy director of the Oregon Department of Corrections a few months later.

“[W]e reject the allegations that any DOC employee would mislead the late Sen. Jackie Winters,” said Black, the prison agency’s communications manager. “Throughout her career, Sen. Winters was a champion of corrections and the important work occurring in Oregon’s prisons.”

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The lawsuit states that in May and August of 2019 Nowak was approached by Department of Corrections employees in the agency’s behavioral health services and policy and business services units to discuss applying for two federal grants. Each grant included an external research component.

The lawsuit states the Department of Corrections employees suggested that the agency’s research unit could act as the required “external Research Partner” so that the funds associated with hiring such a partner could be redirected to fund other projects.

Raney-Eatherly directed Nowak to tell each employee that moving forward in that way would be a misuse of grant funds. Both Raney-Eatherly and Nowak continued to identify incorrect information and concerns related to data in the following months.

In October, Director Colette Peters and Deputy Director Steward told Raney-Eatherly that her work department, the Office of Government Efficiencies and the Research Unit, was being reorganized, according to the lawsuit, resulting in Raney-Eatherly’s demotion.

Nowak then reported to Oregon Department of Corrections leaders that Raney-Eatherly’s demotion and pay cut violated policies.

Later that month, Nowak met with Department of Corrections Inspector General Craig Prins to discuss his vision for restructuring the unit. According to court documents, Nowak said Prins had Nowak’s personnel file on the table and had his assistant join the meeting because of Nowak’s “unprofessional behavior.” The meeting “appeared to be disciplinary but did not follow process,” according to the lawsuit. Nowak brought up Raney-Eatherly’s demotion, and that she would not be involved in misusing grant funds in any way.

In December, Nowak was transferred back to the Correctional Services Division, where she worked prior to her job in the Office of Government Efficiencies and the Research Unit.

In that position, Nowak said she received only one assignment but was excluded from meetings, discussions and decisions related to that assignment.

Similarly, in the position she had newly been demoted to, Raney-Eatherly also said she was excluded from meetings.

Both Raney-Eatherly and Nowak submitted unlawful retaliation complaints in late 2019 and early 2020 to the Oregon Department of Administrative Services.

In March of this year, Nowak and Raney-Eatherly were both notified their positions had been selected for potential layoffs.

Raney-Eatherly elected to be demoted into another available position instead of losing her job. Both that demotion and the previous demotion contributed to making about $6,500 less per month than in her position with the Office of Government Efficiencies and the Research Unit.

Nowak also took a demotion to remain employed, which resulted in a pay cut of more than $3,400 per month.

Both women are demanding a jury trial. They’re requesting economic damages for lost wages and benefits as well as noneconomic damages for being subjected to “anxiety, humiliation, loss of enjoyment of life and emotional distress.”

The next court hearing for the case is set for Monday.

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