Nick Pegueros last month left his three-year post as town manager of Portola Valley under a shadow. But thanks to a new provision inserted into his contract only months before, the public and potential future employers may never know the nature of that shadow -- an "involuntary resignation" that followed a series of closed-session meetings of the Town Council to evaluate his performance.
The new mutual non-disparagement provision in the contract signed in December, when the council apparently was satisfied with Mr. Pegueros' management of Town Hall, banned the council, Mr. Pegueros and -- stunningly -- all other members of the town's staff from talking to the public, the press, or other town employees about any future termination of the contract.
This ill-thought-out clause is troubling, to say the least, and an example of how decisions lightly considered can potentially deprive citizens and potential employers of information they may be entitled to.
Councilwoman Maryann Moise Derwin conceded last week that "naive thinking" on her part led to her decision, and that she would proceed differently with the next town manager's contract.
But Mayor Jeff Aalfs described the clause as "more a statement of intention than a binding statement," and Councilman Craig Hughes indicated that, under certain circumstances, he might not honor the agreement. "I would not ever be party to any coverup of illegal or suspected illegal activity," or any activity that went against the equal opportunity employment or misconduct sections of the town's personnel policies manual, he told the Almanac.
So why would council members include a provision in a legal contract if they aren't firmly committed to adhering to it? The provision is indeed "binding," and not honoring it would make the town legally liable. What if the cause for Mr. Pegueros' firing was misconduct as defined by the town, and Mr. Hughes then spoke publicly about it? One might assume that, in such a case, Mr. Pegueros would have left with far more than the $100,000 severance he received from the town.
The contract provision was a mistake. Observers are almost certain to conclude that something happened between December and July, when Mr. Pegueros' performance reviews began -- something that undermined council members' confidence in him as the town's top manager. It's unlikely that what occurred was merely a disagreement over a management decision; council members have consistently demonstrated their commitment to allowing their top staff member to manage while they set policy.
But the facts behind his departure remain a mystery to the public and, equally important, to residents and city staff members of Menlo Park, where Mr. Pegueros has taken an interim position in City Hall that involves supervision of a number of staff members.
The non-disparagement clause as it pertained to the council and Mr. Pegueros was bad enough, but a provision gagging employees was an egregious misstep on the part of the council. The provision is almost certainly unenforceable in a court of law, which raises the question: Why would the council agree to a legally unenforceable provision in a legally binding document?
We can't know for sure, but it smells like an intimidation tactic. Is that really how council members want to treat loyal employees, or is this just another instance of not thinking through the real-world ramifications of provisions in an employment contract for the town's top job?