Part 3: SBA whistleblowers weigh resolution options

Wednesday - 2/9/2011, 6:46am EST

WFED's Jason Miller

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(This is part 3 of Federal News Radio's investigative series, "Discouraged and Disrespected at SBA.")

By Jason Miller
Executive Editor
Federal News Radio

Karla Saunders is preparing to sue the Small Business Administration in federal court.

She said she has exhausted every other means to stop agency managers from retaliating against her for blowing the whistle on alleged abuse and for testifying on behalf of another employee against SBA senior officials for mistreatment.

The Office of Special Counsel sided with Saunders, determining she was discriminated against and retaliated against for blowing the whistle. She has written several letters to current and past SBA administrators and senior officials asking for help. But, she said, her situation only has deteriorated.

And as of Feb. 8, OSC decided to launch an investigation into Saunders' most recent complaints of retaliation from SBA chief human capital officer Kevin Mahoney. Saunders said Mahoney never returned her to her previous position as head of training as OSC instructed.

"He asked me to come back as an advisor and I said, 'No,'" Saunders said. "But he virtually made me an advisor anyways because he altered the position. They have folks outside of the training division doing training, including a GS-9 who is running training sessions, including one for managers, developing a work plan for training and scheduling meetings with contractors."

Saunders is a GS-15 with more than 25 years of experience in federal HR training.

Vincent Melehy, Saunders' attorney, said he will file a complaint on behalf of Saunders in federal court in the next few months.

"My own litmus test for federal court cases is the case is strong and that the damages are significant because the resources required to litigate in federal court are substantially greater," he said. "Taking an agency to federal court doesn't happen very often."

Melehy, who also represents four other SBA employees who are facing similar management reprisals, said SBA's actions are systemic and the only way to get swift and decisive action is to escalate the case.

Settlement is in the works

Saunders said she has been facing retaliation for about three years. After spending most of her career in human resources and training, SBA managers put her in two positions she wasn't qualified for: the Office of Faith-Based Initiatives and the Office of Entrepreneurial Development.

When OSC ruled in her favor and ordered SBA to make her head of training again, Saunders said the agency gutted her position by taking away staff and budget.

"My focus is not to fix the overall problem at the agency, but to fix the situation for my client," Melehy said. "She wants a federal court jury to say she was retaliated against and discriminated against and award her damages for what the agency has done to her."

But Saunders said she isn't pursuing the case for money. If so, she would have settled with SBA already.

Melehy confirmed settlement negotiations took place, but they didn't go so well. He would not offer specific details about SBA's proposal.

"The settlement negotiations concerned her continued status at the agency, monetary sums and some other details regarding her employment," Melehy said. "The agency significantly changed its position during the settlement discussions a couple of times and at the last minute when we were close to something, they pulled major provisions out of the offer. And, it frankly was a little bit troubling. It created some trust issues."

He added that Saunders and SBA recently have gone back to the bargaining table to settle her case, but a suit in federal court remains in the works if an agreement can't be reached.

"This is about standing up for what's right," Saunders said. "It's about change. It's about treating employees fairly. It's about appreciating the talents employees bring and protecting employees rights and not mistreating them for being brave enough to stand up for what's right."

SBA's Jonathan Swain, the assistant administrator for communications and public liaison, in e-mailed responses to questions said, "Many of your questions relate to ongoing personnel matters pertaining to a few employees. Out of respect for individual employee privacy and to ensure the integrity of the dispute resolution process including potential mediation or settlement, it is the agency's policy to not discuss ongoing or pending personnel matters publicly."

Swain said more generally that one of SBA Administrator Karen Mills' top priorities has been investing in the SBA workforce through training and professional development opportunities. He said SBA has put additional budget resources to training. Last year, he said, more than 1,000 of the agency's employees participated in training and professional development opportunities.