BEFORE THE STATE PERSONNEL BOARD,

STATE OF COLORADO

Case No. 2010G066

MOTION TO DISMISS

ERIN TOLL,

Complainant,

V.

DEPARTMENT OF REGULATORY AGENCIES,

Respondent.

Respondent, Department of Regulatory Agencies (“Respondent”), by and

through the undersigned First Assistant Attorney General, hereby moves for an
order dismissing this matter with prejudice, and as grounds therefor, states as
follows:

I. BACKGROUND
1. By memorandum dated March 16, 2010, Barbara Kelley, Respondent’s
Executive Director, notified Complainant Erin Toll, that she would be placed on
paid administrative leave in order to conduct an investigation of issues involving
Complainant’s employment with Respondent. Ms. Kelley is Complainant’s
appointing authority. The Paid Leave Memo states that Complainant should, if
contacted by the media, respond by stating “no comment.” The Paid Leave Memo
also states that Complainant should not contact other employees of Respondent
during the investigation. The Paid Leave Memo is attached to Complainant’s
Appeal Form.

2. On March 18, 2010, Complainant’s attorney, William Finger, sent a letter

to Ms. Kelley regarding the Paid Leave IMemo. Mr. Finger’s letter states that he
believes Complainant should be able to “tell the press that she believes she has
done nothing incorrect or wrong and she is fully cooperating with you and the
department relating to this situation.” Mr. Finger’s letter also states that she
should be able to tell the press “she has hired legal counsel to protect her rights.”
1\’Ir. Finger’s letter also states that Complainant should not be prohibited from
talking to Respondent’s employees because this instruction could violate her “free
association” rights by limiting her ability to talk to other department employees in
certain situations. Letter dated March 18, 2010 from Mr. Finger attached as
EXHIBIT A.

3. In response to Mr. Finger’s letter, Ms. Kelley faxed a letter dated March
22, 2010, to Mr. Finger stating that she will modify the press contact directive in
the Paid Leave Memo to state that if contacted by the press, Complainant may state
that “she believes she has done nothing incorrect or wrong and she is fully
cooperating with Ms. Kelley and the Department” and that she may state “she has
hired legal counsel to make sure her rights are protected.” The letter also states
that if there is a situation where Complainant would like to contact one of
Respondent’s employees, she should check with Ms. Kelley, who will provide a
response or additional direction regarding the contact. March 22nd letter is
attached to Complainant’s Appeal Form.

4. As of the filing of this motion, Complainant has not asked Ms. Kelley if
she could contact any of Respondent’s employees.

5. On or about March 25, 2010, Complainant filed an Appeal with the State
Personnel Board. The specific actions appealed are as follows: (1) the placement of
Complainant on paid administrative leave during the investigation; (2) Ms. Kelley’s
alleged action of “retracting the position that Mr. Harvey is involved in an
investigation and making it appear that I provided inaccurate information”; (3) Ms.
Kelley’s alleged decision to “kill an investigation of licensees of American Home
Funding, 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 press
and a ban on my contacts and association with department employees”; (5) that
Complainant is “targeted for termination” and the actions make it impossible “to
return and properly perform my duties and responsibilities”; (6) the alleged
improper release of personal information when placed on leave; and (7) the alleged
“interference by the Executive Director of my job duties and responsibilities.”

6. Attached to the appeal is a Whistleblower Complaint Form alleging that

Complainant released protected information, and as a result she was placed on paid
administrative leave; that personal information was released; that Respondent
violated her associational and free speech rights; that a written threat of discipline
was made; and that there was a wrongful taking of authority.

7. On March 25, 2010, Complainant filed a Grievance Form with

Respondent. Grievance Form attached as EXHIBIT B.

8. The Grievance Form states that Complainant is grieving the following

issues: (1) placement on paid administrative leave; (2) the alleged action of Ms.
Kelley in “retracting the position that Mr. Harvey is being investigated and making
it appear that I provided inaccurate information”; (3) the alleged decision of Ms.

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Kelley to “kill an investigation of American Funding, Inc.’s employees”; (4) the
instructions given in the Paid Leave Letter regarding comments to the press and
contacts with Respondent’s employees; (5) Complainant is “targeted for
termination” and the actions make it impossible “to return and properly perform my
duties and responsibilities”; (6) the alleged improper release of personal information
when placed on leave; and (7) the alleged “interference by the Executive Director of
my job duties and responsibilities.”

II. MOTION TO DISMISS

A. Grievance

9. Complainant has the burden to establish grounds that merit a hearing

and that the relief requested is within the Board’s statutory authority. State
Personnel Board Rule 8-50(G).

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

11. Board Rule 8-8 provides the process for initiating grievances in the state
personnel system and states that “the grievance process is designed to address and
resolve problems...” The rule provides that the process is initiated by notifying the
supervisor of the grievance and that the process is not completed until the final
written grievance decision is issued by the agency. See Ivy v. State Personnel
Board, 860 P.2d 602, 603-04 (Cob. App. 1993) (grievance process established by
Board rule provides that if the employee is not satisfied with an agency’s decision
she may file an appeal with the Board).

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

13. Respondent respectfully requests that this matter be referred back to

Respondent in order to give the agency an opportunity to render a final grievance
decision.

B. Whistleblower Complaint

14. Complainant’s Whistleblower Complaint, filed pursuant to the State

Employee Protection Act, § 24-50.5-101, et seq. C.R.S. (Whistlebbower Act) fails to
,

show 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 taking

disciplinary action against an employee in retaliation for disclosing whistleblower
information. Section 24-50.5-102(1), C.R.S. defines “discipline” as “any direct or
indirect 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, reduction
in force, or withholding of work, or the threat of any such discipline or penalty.”

17. Complainant first claims that she was disciplined by being placed on paid
administrative leave pending the investigation. State Personnel Director’s
Procedure 5-20 states that “administrative leave may be used to grant paid time in
situations where the appointing authority wishes to release employees from their
official duties for the good of the state.” Board Rule 6-12 states that “administrative
leave during a period of investigation is not a disciplinary action.”

18. Since paid administrative leave during an investigation is permitted by

rule, and is not a disciplinary action, Complainant fails to show that this was
discipline in violation of the Whistleblower Act.

19. Complainant next claims that Respondent disciplined Complainant by

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

20. Complainant’s third claim of discipline is that Respondent violated her

free speech and associational rights in the Paid Leave Letter. Specifically she
claims that the instruction to only tell the media “no comment” and the follow up
instruction in the March 22nd letter to say “she believes she has done nothing
incorrect or wrong and she is fully cooperating with Ms Kelley and the
Department” and that she may state “she has hired legal counsel to make sure her
rights are protected” was a disciplinary action. It is disingenuous for Complainant

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to allege that this instruction is discipline since her attorney specifically requested
that she be able to say this precise language in his letter to Ms. Kelley. See
EXHIBIT A, p. 2. Since Ms. Kelley modified the instruction using the exact
language requested by Complainant, this cannot now be called discipline.

21. Additionally, Ms. Kelley’s instruction not to talk to Respondent’s

employees during the investigation and the clarification that she may follow up
with Ms. Kelley when a specific situation occurs is not discipline. Since
Complainant does not allege a specific situation wherein Ms. Kelley denied
Complainant the right to talk to an employee of Respondent, she cannot allege that
Ms. Kelley violated her right to free association. This claim is not ripe until an
actual improper denial occurs. See Beauprez v. Avalos, 42 P.3d 642, 648 (Cob.
2002) (ripeness requires that there be an actual case or controversy between the
parties that is sufficiently immediate and real so as to warrant adjudication);
Robertson v. Westminster Mall Co., 43 P.3d 622, 628 (Cob. App. 2001) (a court has
no jurisdiction to render an advisory opinion on a controversy that is not yet ripe, or
to decide a case on a speculative, hypothetical, or contingent set of fact). Since this
instruction is not ripe, this could not be considered discipline.

22. Complainant also alleges that “a written threat of discipline” was made
and that this was considered discipline under the Whistleblower Act. Complainant
fails to state what document contains the “written threat of discipline” except to
include the two documents from Ms. Kelley with the Appeal, the Paid Leave Memo
and the March 22nd letter. Neither of these letters contains a “written threat of
discipline.” In fact, neither letter uses the word “discipline.” As a result, the
allegation of a “written threat of discipline” is not supported.

23. Finally, Complainant alleges that she was disciplined as a result of a

“wrongful taking of authority” by Ms. Kelley. Complainant fails to articulate how
Ms. Kelley took her authority. If she means it was taken away when she was placed
on paid administrative leave, then that must be rejected. As argued above
administrative leave is permitted by Board rule and Personnel Director’s procedure
and is not discipline.

24. Additionally, the Appointing Authority’s powers include defining a job,

assigning employees to positions and accountability for any other responsibilities in
rule. Ms. Kelley, as Complainant’s appointing authority and Respondent’s
Executive Director, is responsible and accountable for all position and authority at
the Department. In a situation involving an investigation of an employee it is
appropriate and reasonable for an appointing authority to assume authority.

25. Finally, this issue was raised in the grievance filed with Respondent,
EXHIBIT B, and will be addressed pursuant to Board Rule 8-8. Complainant fails
to show what authority was taken, and that if any authority was taken, that it

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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 of March 2010.

JOHN W. SUTHERS
Attorney General
/ —

VINCENT E. MORSCHER, 34816*

First Assistant Attorney General
Civil Litigation & Employment Law Section

Attorneys for Respondent

1525 Sherman Street, 7th Floor

Denver, Colorado 80203
Telephone: (303) 866-5305
Facsimile: (303) 866-5443
*Counsel of Record

CERTIFICATE OF SERVICE

This 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, postage
prepaid, at Denver, Colorado, this day of March 2010 addressed as follows:

William S. Finger, Esq.

Tamara J. Wayland, Esq.
Frank & Finger, P.C
P.O. Box 1477
2905 D Upper Bear Creek Drive
Evergreen, Colorado 80437

& Via Facsimile to: (303) 674-6684 4

../

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V JIIIHIX3
 FRANK ‘ FINGER, PC.
ATtORNEYS AT lAW -

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

Marchl8,2010

Via acsimUe 303-894-7885

and IJaxd Copy

PERSONAL AND CQNFJDENTIAL

Barbara Kefley, Executive Director

Department of Regulatory Agencies
lS6OBroadway, suite 1550
Denver, CO 80202

Re: Erin Toil

Dear Ms. lCellcy:

This office and I have becn retained by Erin Toll concerning her employment situation at
the Department of Regulatoiy Agencies. Ms. Toll has provided me a copy of your March16,
2010 menioianduzn, placing her on administrative leave. We have been requested to coordinate
with Ms. Toll, the department and its chosen investigator in scheduling a meeting. Ms. Toll has
provided Ms. 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 of
March 16, 2010, create grave concerns for me and my client. Let me articulate some of those
concerns Ibr you in light of the March 18, 2010 front page Denver Post article. First, it is my
understanding that someone within the dcpaxlxnent released information to outside individuals
that Ms. Toll was on administrative leave. This fact is potentially a violation of state law and
privacy rights of my client. This coupled with the fact that your memorandum of March 16, 2010
indicates to my client that all she can say about the situation is “no comment” adversely affects
my client’s reputation and potentially the public’s perception of Ms. Toll.

EXHIBIT
E•mali: FANDFPC@AOLCOM
29025.D UPPER BEAR CREEK RD. ° EVERGREEN, COLORADO 80439
Barbara Keilcy
March 18. 2010
Pagc2

e to mortgage broker
Ms. Toll has spàkcn out about matters of public importance relativ
the public interest. Yaw
practices. She has exercised her office in a diligent fashion that is in
be assailed by others
instructions to Ms. Toll leaves her somewhat defenseless where she can
clearly unders tands the necessfty to
including Representative Ted Harvey. While Ms. Toll
at the same time as an American
coordinate with the department regarding various issues, she
cornm eaL” Ms.
citizen has a right to defend her own integrity with something more than ‘no
Toll will certainly not comment concerning the merits of the Issues
involv but believe she
ed, we
wrong and she is
has a right to tell the press that she believes she has done nothing incorrect or
also believe she has a
fully cooperating with you and the department relating to this situation. I
counsel to
right, either directly or through my office, to tell the press that she has hired legal
modify the instruc tion concer ning press
protect her rights. We are therefore demanding that you
comment.

Further, your memorandum of March 16, 2010 is overreaching concerning

cOfluflUfliC2tlOfl with department employees. You have
every right to tell Ms. Toll that she is not
to communicate with department emplo yees about the issues under investigation, Mr. Harvey’s
actions, or the actions of American Rome Fundin g, or any other subject matter of concern to you.
Your instructions, bowever, go far beyond that You have, in your instructions, interfered with
Ms. Toll’s freedom of association. Ms. Toll has a right to associate with other department
employees. For example, jiMa. Toll goes to a dinner and another department employee is
prescz1t, she has a right to be at that dinner, talk to the other employee about unrelated DORA
matters. 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 March
ent
16,2010,1 do wish to give you assurances that Ms. Toll will lidly cooperate with the departm
as quickl y as possib le in a
in any investigation.. It is Ms. Toll’s desire to resolve the matter
mutually acceptable fashion.

I have placed a call to the Governor’s counsel, Craig Welling, to see lithe Governor’s
office is willing to assist or mediate in an attempt to reach a resolution of the situation. It is my
hope that the Governor’s office will support a process for reaching a resolution to the situation. I
am providing a copy of this letter only to yourself and my client because of it’s sensitive nature.
I will be asking my client to keep this communication confidential at this time.

My client also is requesting that the department be responsible for the payment ofmy
attorney’s fees for representation because attacks made onmy client all arise out of the scope of
employment and duties as an employee. We believe that the Attorney General’s Office must be
Barbara Kdlley
MarclzlS,2010
Page 3

conflicted out of representation. 1 suggest that you consult the Attorney General’s oflice
concerning the duty and responsibility of that othce to represent and the Qbligation to pay legal
expenses where the Attorney General’s office is conflicted out of a matter.

Thank you for your cooperation.

Very yours,

S. Finger
WSF:eg
cc: EririToll
H JiHulX3
 .

GRIEVANCE FORM

NOTICE: Do NOT use this fomi if you have received a

discip1nary action, have been laid off or
have been aiministrative1y separated. Use the Con.wlidafedAppeal/Dispute
Fonn available on
the web at: p//www.coIorado. ov1 s/S lliteiTPA-SPWS?/2
3272 1347216.
Print or type. Keep a copy of the completed grievance form
for yourse’f. Refer to Chapter 8 of
the State Personnel beard Rules and Personnel Directo?s Adniiu
istrative Procedures for
information regarding the grievance process. (Board Rule 8-8)

If you would like to resolve this grievance on an infon

nal basis, with the help of a trained
facilitator from outside you department, then call the State
Employees Mediation Program
(SEMP) at 303-866-4314 for this assistance.

GRIEVANT’S NAME: Erin Toll

GRIEVANTS ADDRESS: 2312 S. .Fjjjxnpre Street, Denver, CO 80210
REPRESENTATIVE: William S. Finger. Fr &FngçrP.C. -

REPRESENTATIVE’S ADDRESS: P.O. Box 1477. EverR

reen. CO 80437-1477
EMPLOYING DEPARTMENT: J)epartment oiRegulatorvAgencies
STATEMENT OF ORIEYNCE
I am grieving the action of the Executive Director of the
Department On March Ift 2010, I was
placed on involuntary administratlv leave by Barbara J.
Keiley. I am grieving that action. The
memorandum that I wae furnished does not specify any
legitimate reasons for such a drastic acbon. The
action, according to the information that I have, relates and is based
upon my ults investigation of one or
more mortgage broker If censees who are employees
of American Home Funding, Inc. One employee of
that entity is Ted Harvey, who is a member of the legisla
ture. 1 engaged in prote;ted autivity when I
informed a legislative committee chairperson who questio
ned me about Mr. Harvey’s hostility. I told that
member of the legislature that the licensees were under
investigation. It IS my understanding that Mr.
Harvey has not disclosed to the legislature his connec
tion with American Home Funding, Inc., and his
economic Interest in certain legislation. This could potenti
ally be a misuse of power or improper act by a
government official and potentially presents ethical issues,
I believe that I am being retaliated against for
providing information concerning Mr. Harvey’s connec
tion to Amencan Home Funding to a member or
members of the legislature. 1 also believe that I
am being targeted for providing information under a
Open Records Request (CORA). The information provid
I ed was about American Home Funding, Inc.

I am also grieving the action of the Executive Director that

took place in retracting the position that
Mr. Harvey is being investigated arid making it appear that
I provided inaccurate information. Mr. Harvey

1 EXHIBIT
 :
-
-

was or is being investigated or should be investigated, as well as

numerous other licensees of American
Home Funding because of misleading advertisemeriL The decsio
n to engage in a formal investigation
was 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 Home
Funding, Inc.’s employees, who are licensed, and not to notify the
persons being investigated through a
letter. This is, in my opiriron, government mismanagement, waste or
other improper action.

AddWonalty, I am grieving instructions given to me as to what can

I say to the press arid a ban on
my contacts and association with department employees- This
appears in the March 16, 2010
memorandum. A minor modification occurred in the recent comm
unication of March 22, 2010. The
memorandum of March 16, 20W contains a threat, which
has a chilling affect on my rights. It is my
position that limitations on statements to the press, when I
am under personal attack, and the ban on my
contact with employees is a violation 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 in
whistlebfowing.

Additionally. I believe that I am now targeted for termination arid

that the actions taken effectively
make It impossible for me to return and property perform my duties
and responsibilities because my
authority has been underrut I therefore believe that I have been
or am being consfructivety terminated or
discharged from employment

I am also grieving the improper release of personnel information

that occurred when I was placed
on leave

Lastly. I am grieving the interference b the Executive Directo

r of my job duties and
respons1li1ities. I assert that this is an abuse of power
and mismanagement.

I am requesting that the Step 1 and Step 2 process be consol

idated arid the matter be handled by
the Executive Director.

RELIE
I am requesting a return to my position with full power and authority to
exercise the posWon I am
also requesting a full public apology for improperly releasi person
ng nel information. Lastly, I am
requesting remedlation of my work environment to arid harassm
ent and hostility. Finail, I am requesting
that the Department pay my attorney’s fees and costs.

2
 DISCRIMINATION G YES 0 NO. TYPE OF J)ISCRIMINATION ALLEGED (eg..,
ALLEGEJY: itsi origin, se,ç age. religion):
,

aNOm If the grievance involves an allegation of discrimination, written notice

must be seilt to
the State Personnel Board, 633 I7 Stxect, Suite 1320, Denver, Colorado 80202-3604, within ten
(10) calendar days of the alleged discriminatory practice.

REPORTING CKAIN:
(Complete where applicable)

Fiit/Second Line supervisor (nnnie)L BataIJ(e1Iey

Date of the informal discussion with the First/Second Line Supervisox
Date the Step I informal discussion with the Ffrstiecond Line Supervisor was
concluded:

Appointing Authority (name): Barbara U(eI]c

Date Written Grievance was submitted to the Appointing Authority:_______________
Date of the meeting with the Appointing Authority -.
—-

Date Grievant received the Step 2 Written Response from the Appointing Authority;

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

Grievaut’s Signahxre:_____________________ Date: 2< /(3_