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BEFORE THE STATE PERSONNEL BOARD,STATE OF COLORADOCase No. 2010G066

MOTION TO DISMISSERIN TOLL,Complainant,V.

DEPARTMENT OF REGULATORY AGENCIES,Respondent.

Respondent, Department of Regulatory Agencies (Respondent), by andthrough the undersigned First Assistant Attorney General, hereby moves for anorder dismissing this matter with prejudice, and as grounds therefor, states asfollows:

I. BACKGROUND1. By memorandum dated March 16, 2010, Barbara Kelley, Respondents

Executive Director, notified Complainant Erin Toll, that she would be placed onpaid administrative leave in order to conduct an investigation of issues involvingComplainants employment with Respondent. Ms. Kelley is Complainantsappointing authority. The Paid Leave Memo states that Complainant should, ifcontacted by the media, respond by stating no comment. The Paid Leave Memoalso states that Complainant should not contact other employees of Respondentduring the investigation. The Paid Leave Memo is attached to ComplainantsAppeal Form.

2. On March 18 , 2010, Complainants attorney, William Finger, sent a letterto Ms. Kelley regarding the Paid Leave IMemo. Mr. Fingers letter states that hebelieves Complainant should be able to tell the press that she believes she hasdone nothing incorrect or wrong and she is fully cooperating with you and thedepartment relating to this situation. Mr. Fingers letter also states that sheshould be able to tell the press she has hired legal counsel to protect her rights.1\Ir. Fingers letter also states that Complainant should not be prohibited fromtalking to Respondents employees because this instruction could violate her freeassociation rights by limiting her ability to talk to other department employees in


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certain situations. Letter dated March 18, 2010 from Mr. Finger attached asEXHIBIT A.

3. In response to Mr. Fingers letter, Ms. Kelley faxed a letter dated March22 , 2010, to Mr. Finger stating that she will modify the press contact directive inthe Paid Leave Memo to state that if contacted by the press, Complainant may statethat she believes she has done nothing incorrect or wrong and she is fullycooperating with Ms. Kelley and the Department and that she may state she hashired legal counsel to make sure her rights are protected. The letter also statesthat if there is a situation where Complainant would like to contact one ofRespondents employees, she should check with Ms. Kelley, who will provide aresponse or additional direction regarding the contact. March 22nd letter isattached to Complainants Appeal Form.

4. As of the filing of this motion, Complainant has not asked Ms. Kelley ifshe could contact any of Respondents employees.

5. On or about March 25, 2010, Complainant filed an Appeal with the StatePersonnel Board. The specific actions appealed are as follows: (1) the placement ofComplainant on paid administrative leave during the investigation; (2) Ms. Kelleysalleged action of retracting the position that Mr. Harvey is involved in aninvestigation and making it appear that I provided inaccurate information; (3) Ms.Kelleys alleged decision to kill an investigation of licensees of American HomeFunding, Inc. and barring notification of persons that an investigation is occurring;(4) the instruction in the Paid Leave Letter regarding what I can say to the pressand a ban on my contacts and association with department employees; (5) thatComplainant is targeted for termination and the actions make it impossible toreturn and properly perform my duties and responsibilities; (6) the allegedimproper release of personal information when placed on leave; and (7) the allegedinterference by the Executive Director of my job duties and responsibilities.

6. Attached to the appeal is a Whistleblower Complaint Form alleging thatComplainant released protected information, and as a result she was placed on paidadministrative leave; that personal information was released; that Respondentviolated her associational and free speech rights; that a written threat of disciplinewas made; and that there was a wrongful taking of authority.

7. On March 25 , 2010, Complainant filed a Grievance Form withRespondent. Grievance Form attached as EXHIBIT B.

8. The Grievance Form states that Complainant is grieving the followingissues: (1) placement on paid administrative leave; (2) the alleged action of Ms.Kelley in retracting the position that Mr. Harvey is being investigated and makingit appear that I provided inaccurate information; (3) the alleged decision of Ms.

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Kelley to kill an investigation ofAmerican Funding, Inc.s employees; (4) theinstructions given in the Paid Leave Letter regarding comments to the press andcontacts with Respondents employees; (5) Complainant is targeted fortermination and the actions make it impossible to return and properly perform myduties and responsibilities; (6) the alleged improper release of personal informationwhen placed on leave; and (7) the alleged interference by the Executive Director ofmy job duties and responsibilities.

II. MOTION TO DISMISSA. Grievance

9. Complainant has the burden to establish grounds that merit a hearingand that the relief requested is within the Boards statutory authority. StatePersonnel Board Rule 8-50(G).

10. Board Rule 8-1 states that disputes should be resolved at the lowestlevel and as informally as possible. Rule 8-6 states that an employee may file anappeal with the State Personnel Board after a final written grievance decision isrendered by the highest level of relief in a department.

11. Board Rule 8-8 provides the process for initiating grievances in the statepersonnel system and states that the grievance process is designed to address andresolve problems... The rule provides that the process is initiated by notifying thesupervisor of the grievance and that the process is not completed until the finalwritten grievance decision is issued by the agency. See Ivy v. State PersonnelBoard, 860 P.2d 602, 603-04 (Cob. App. 1993) (grievance process established byBoard rule provides that if the employee is not satisfied with an agencys decisionshe may file an appeal with the Board).

12. Complainant has simultaneously filed an appeal with the Board and agrievance with Respondent regarding the exact same issues. As provided by law,Respondent must have an opportunity to resolve the issues addressed in thegrievance prior to Complainant filing an appeal with the Board.

13. Respondent respectfully requests that this matter be referred back toRespondent in order to give the agency an opportunity to render a final grievancedecision.B.Whistleblower Complaint

14. Complainants Whistleblower Complaint, filed pursuant to the StateEmployee Protection Act, 24-50.5-101, et seq. , C.R.S. (Whistlebbower Act) fails toshow that she was disciplined in retaliation for disclosing protected information. As

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a result, the Whistleblower Complaint must be dismissed.15. The Whistleblower Complaint alleges that Complainant released

protected information, and as a result she was retaliated against as follows: (1)placement on paid administrative leave; (2) having personal information released;(3) having Respondent violate her associational and free speech rights; (4)threatening discipline; and (5) a wrongful taking of authority.

16. Section 24-50.5-103, C.R.S. prohibits an appointing authority from takingdisciplinary action against an employee in retaliation for disclosing whistleblowerinformation. Section 24-50.5-102(1), C.R.S. defines discipline as any direct orindirect form of discipline or penalty, including but not limited to, dismissal,demotion, transfer, reassignment, suspension, corrective action, reprimand,admonishment, unsatisfactory or below standard performance evaluation, reductionin force, or withholding ofwork, or the threat of any such discipline or penalty.

17. Complainant first claims that she was disciplined by being placed on paidadministrative leave pending the investigation. State Personnel DirectorsProcedure 5-20 states that administrative leave may be used to grant paid time insituations where the appointing authority wishes to release employees from theirofficial duties for the good of the state. Board Rule 6-12 states that administrativeleave during a period of investigation is not a disciplinary action.

18. Since paid administrative leave during an investigation is permitted byrule, and is not a disciplinary action, Complainant fails to show that this wasdiscipline in violation of the WhistleblowerAct.

19. Complainant next claims that Respondent disciplined Complainant byreleasing the personnel information that Complainant was on paid leave.Complainant claims that this release of information was done with the approval ofMs. Kelley. The Complaint provides no detail, documentation or specificinformation that the Department ever released any information regarding theplacement of Complainant on leave or that Ms. Kelley approved such release.Nevertheless, even if Respondent did release information that Complainant was onpaid leave, this does not constitute discipline under the Whistleblower Act becauseif fails to meet the definition under 24-50.5-102(1).

20 . Complainants third claim of discipline is that Respondent violated herfree speech and associational rights in the Paid Leave Letter. Specifically sheclaims that the instruction to only tell the media no comment and the follow upinstruction in the March 22nd letter to say she believes she has done nothingincorrect or wrong and she is fully cooperating with Ms Kelley and theDepartment and that she may state she has hired legal counsel to make sure herrights are protected was a disciplinary action. It is disingenuous for Complainant

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constitutes discipline under the Whistleblower Act.WHEREFORE, Respondent respectfully requests that this matter be

dismissed and referred back to Respondent to handle the grievance.Respectfully submitted this 29th day ofMarch 2010.

JOHN W. SUTHERSAttorney General

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VINCENT E. MORSCHER, 34816*First Assistant Attorney GeneralCivil Litigation & Employment Law SectionAttorneys for Respondent1525 Sherman Street, 7th FloorDenver, Colorado 80203Telephone: (303) 866-5305Facsimile: (303) 866-5443*Counsel of Record

CERTIFICATE OF SERVICEThis is to certify that I have duly served the within MOTION TO DISMISS

upon all parties herein by depositing copies of same in the United States mail, postageprepaid, at Denver, Colorado, this day ofMarch 2010 addressed as follows:William S. Finger, Esq.Tamara J. Wayland, Esq.Frank & Finger, P.CP.O. Box 14772905 D Upper Bear Creek DriveEvergreen, Colorado 80437& Via Facsimile to: (303) 674-6684 4

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FRANK FINGER, PC.ATtORNEYS AT lAW -

PO.BOX 1477PHONE (303) 674.6955 fVnREEN. COLORAbO O457.J 477 A (303)674.6684

Marchl8,2010

Via acsimUe 303-894-7885and IJaxd Copy

PERSONALAND CQNFJDENTIAL

Barbara Kefley, Executive DirectorDepartment ofRegulatory AgencieslS6OBroadway, suite 1550Denver, CO 80202Re : Erin Toil

Dear Ms. lCellcy:This office and I have becn retained by Erin Toll concerning her employment situation atthe Department ofRegulatoiy Agencies. Ms. Toll has provided me a copy of your March16,2010 menioianduzn, placing her on administrative leave. We have been requested to coordinatewith Ms. Toll, the department and its chosen investigator in scheduling a meeting. Ms. Toll has

providedMs. Peterson dates that I am available for a meeting wIth the investigator.The actions taken by the department and instructions given to Ms. Toll in your letter ofMarch 16, 2010, create grave concerns for me and my client. Let me articulate some of thoseconcerns Ibr you in light of the March 18, 2010 front page Denver Post article. First, it is myunderstanding that someone within the dcpaxlxnent released information to outside individualsthat Ms. Toll was on administrative leave. This fact is potentially a violation of state law andprivacy rights ofmy client. This coupled with the fact that your memorandum ofMarch 16, 2010indicates to my client that all she can say about the situation is no comment adversely affects

my clients reputation and potentially the publics perception ofMs. Toll.

Emali: FANDFPC@AOLCOM EXHIBIT29025.D UPPER BEAR CREEK RD. EVERGREEN, COLORADO 80439


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Barbara KeilcyMarch 18. 2010Pagc2

Ms. Toll has spkcn out about matters of public importance re lative to mortgage brokerpractices. She has exerc ised her office in a diligent fashion that is in the public interest . Yawinstructions to Ms. Toll leaves her somewhat defenseless where she can be assailed by othersincluding Representative Ted Harvey. While Ms. Toll clearly understands the necessfty tocoordinate with the department regarding various issues, she at the same time as an Americancitizen has a right to defend her own integrity with something more than no cornmeaL Ms.Toll will certainly not comment concerning the merits of the Issues involved, but we believe shehas a right to tell the press that she believes she has done nothing incorrect or wrong and she isfully cooperating with you and the department relating to this situation. I also believe she has aright, either directly or through my office, to tell the press that she has hired legal counsel toprotect her rights. We are therefore dem anding that you

modify the instruction concerning presscomment.

Further, your memorandum of March 16, 2010 is overreaching concern ingcOfluflUfliC2tlOfl with department employees. You have every right to tell Ms. Toll that she is notto communicate with department employees about the issues under investigation , Mr. Harveysactions, or the actions of American Rome Funding, or any other subject matter of concern to you.Your instructions, bowever, go far beyond that You have, in your instructions, interfered withMs. Tolls freedom of association. Ms. Toll has a right to associate with other departmentemployees. For example, jiMa. Toll goes to a dinner and another department employee isprescz1t, she has a right to be at that dinner, talk to the other employee about unrelated DORAmatters. For that reason I am also requesting that you modify your instruction in the March 16,2010 memorandum.

While taking issue with the above requirements conr.aincd in your memorandum of March16,2010,1 do wish to give you assurances that Ms. Toll will lidly cooperate with the departmentin any investigation.. It is Ms. Tolls desire to resolve the matter as qu ickly as possible in amutually acceptable fashion.

I have placed a call to the Governors counsel, Craig Welling, to see lithe Governorsoffice is willing to assist or mediate in an attempt to reach a resolution ofthe situation. It is myhope that the Governors office will support a process for reaching a resolution to the situation. Iam prov iding a copy of this letter only to yourself and my client because of its sensitive nature.I will be asking my client to keep this communication confidential at this time.

My client also is requesting tha t the department be responsible for the payment ofmyattorneys fees for representation because attacks made onmy client all arise out of the scope ofemployment and duties as an employee. We believe that the Attorney Generals Office must be


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Barbara KdlleyMarclzlS,2010Page 3

conflicted out of representation. 1 suggest that you consul t the Attorney Generals ofliceconcerning the duty and responsibility of that othce to represent and the Qbligation to pay legalexpenses where the Attorney Generals office is conflicted ou t of a matter.Thank you for your cooperation.

WSF:egcc: EririToll

Very yours,

S. Finger


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.GRIEVANCE FORM

NOTICE: Do NOT use this fomi if you have received a discip1nary action, have been laid off orhave been aiministrative1y separated. Use the Con.wlidafedAppeal/Dispute Fonn available onthe web at: p//www.coIorado.ov1 s/S lliteiTPA-SPWS?/23272 1347216.Print or type. Keep a copy of the completed grievance form for yoursef. Refer to Chapter 8 ofthe State Personnel beard Rules and Personnel Directo?s Adniiuistrative Procedures forinformation regarding the grievance process. (Board Rule 8-8)If you would like to resolve this grievance on an in fonnal basis, with the help of a trainedfacilitator from outside you department, then call the State Employees Mediation Program(SEMP) at 303-866-4314 for this assistance.GRIEVANTS NAME: Erin TollGRIEVANTS ADDRESS: 2312 S. .Fjjjxnpre Street, Denver, CO 80210REPRESENTATIVE: William S. Finger. Fr &FngrP.C. -REPRESENTATIVES ADDRESS: P.O. Box 1477. EverRreen. CO 80437-1477EMPLOYING DEPARTMENT: J)epartment oiRegulatorvAgencies

STATEMENT OF ORIEYNCEI am grieving the action of the Executive Director of the Department On M arch Ift 2010, I wasplaced on involun tary administratlv leave by Barbara J. Keiley. I am grieving that action. Thememorandum that I wae furnished does not specify any legitimate reasons for such a drastic acbon. Theaction, according to the information that I have, relates and is based upon my ults investigation of one ormore mortgage broker Ifcensees w ho are employees of American Home Funding, Inc. One employee ofthat entity is Ted Harvey, who is a member of the legislature. 1 engaged in prote;ted autiv ity when Iinformed a legi slat iv e committee chairperson w ho questioned me about Mr. Harveys hostility. I told thatmember of the legislature that the licensees were under investigation. It IS m y understanding that Mr.Harvey has not disclosed to the legislature his connection with American Home Fu ndin g, Inc., and hiseconomic Interest in certain legi slat io n. This could potentially be a misuse of power or improper act by agovernment official and potentia lly presents ethical issues, I believe that I am being retaliated against forproviding information concerning Mr. Harveys connection to Amencan Home Funding to a member ormembers of the legislature. 1 also believe that I am be ing targeted for pro vid in g in fo rm at io n under aOpen Records Request (CORA). The information I provided was about American Home Funding, Inc.

I am also grieving the action of the Executive Direc tor that took place in retracting the position thatMr. Harvey is being investigated arid m akin g it appear that I provided inaccurate information. Mr. Harvey1 EXHIBIT


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was or is being investigated or should be investigated, as well as numerous other licensees of AmericanHome Funding because of misleading advertisemeriL The decsion to engage in a formal investigationwas made in Januaiy or early Pebrury 2010 and is documented i an emaiI.I am also grieving the decision of the Executive Director to kill an investigation of American HomeFunding, Inc.s employees, who are licensed, and not to notify the persons being investigated through aletter. This is, in my opiriron, government mismanagement, waste or other improper action.AddWonalty, I am grieving instructions given to me as to what I can say to the press arid a ban onmy contacts and association with department employees- This appears in the March 16, 2010memorandum. A minor modification occurred in the recent communication of March 22, 2010. Thememorandum of March 16, 20W contains a threat, which has a chilling affect on my rights. It is myposition that limitations on statements to the press, when I am under personal attack, and the ban on mycontact with employees is a violat ion of my rights under the state and federal constitution, Including liberty

rights, association rights and free speech rights. This is also a threat against me, if I engage inwhistlebfowing.

Additionally. I believe that I am now targeted for termination arid that the actions taken effectivelymake It impossible for me to return and proper ty perfo rm my duties and responsibilities because myauthority has been underrut I therefore believe that I have been or am being consfructivety terminated ordischarged from employmentI am also grieving the improper release of personnel inform ation that occurred when I was placedon leave

Lastly. I am grieving the interference b the Executive Director of my job duties andrespons1li1ities. I assert that this is an abuse of power and mismanagement.I am requesting that the Step 1 and Step 2 process be consolidated arid the matter be handled bythe Execu tive Director.

RELIEI am requesting a return to my position with full power and authority to exercise the posWon I amalso requesting a full public apology for improperly releasing personnel information. Lastly, I am

requesting remedlation of my work environment to arid harassment and hostili ty. Finail, I am requestingthat the Department pay my attorneys fees and costs.

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DISCRIMINATION G YES 0 NO. TYPE OF J)ISCRIMINATION ALLEGED (eg..,ALLEGEJY: , itsi origin, se, age. religion):aNOm If the grievance involves an allegation ofdiscrimination, written notice must be seilt tothe State Personnel Board, 633 I7 Stxect, Suite 1320 , Denver, Colorado 80202-3604 , within ten(10) calenda r days of the alleged discriminatory prac tice .REPORTING CKAIN:(Complete where applicable)

Fiit/Second Line supervisor (nnnie)L BataIJ(e1IeyDate of the informal discussion with the First/Second Line SupervisoxDate the Step I informal discussion with the Ffrstiecond Line Supervisor wasconcluded:

Appointing Authority (name): Barbara U(eI]cDate Written Grievance was submitted to the Appo inting Authority:_______________Date of the meeting with the Appointing Authority -. -Date Grievant received the Step 2 Written Response from the Appointing Author ity;

Date Petition for Rearing was eithet filed with , or postmarked to, the State Personnel Board:

Grievauts Signahxre:_____________________ Date: 2< /(3_

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