Lawsuit brought by fired Vallejo housing manager settled for $130K

VALLEJO – A Solano County Superior Court judge ordered a former city of Vallejo housing manager to abide by a $130,000 settlement last month, denying her request to renegotiate due to information revealed in another harassment claim against the city.

Former housing manager Judy Shepard-Hall sued the city in March 2023, claiming the city fired her in retaliation for her complaints about discrimination and harassment. She alleged that she was denied the accurate title and appropriate pay for her role due to discrimination she faced as an African-American woman. She also claimed that other city employees excluded her from meetings relevant to her duties and then scapegoated her for $4.6 million in budget overruns during development of the city’s homeless navigation center. 

In late January, Shepard-Hall agreed to a settlement of $130,000. But according to court documents, her attorney made a request to reopen negotiations for monetary compensation after Shepard-Hall saw an article in the Vallejo Sun about a harassment lawsuit filed by former Vallejo city spokesperson Christina Lee in February. 

In an email to the city’s legal team, Shepard-Hall’s attorney Glicel Sumagaysay wrote the settlement amount was "unconscionable" considering the information revealed in Lee’s complaint that is “highly relevant and favorable to Mrs. Shepard-Hall’s claims.”

Sumagaysay argued that Lee’s allegations of bullying and retaliation by Assistant City Manager Gillian Haen, formerly Hayes, confirmed the validity of Shepard-Hall’s claims that she was harassed by Haen and showed that the city of Vallejo had repeatedly overlooked Haen’s bullying and retaliation against other women employed by the city.

Shepard-Hall’s lawsuit alleges that Haen had yelled at her and humiliated her in front of another employee. After making complaints about the behavior, she was allegedly denied a raise and required to report to Haen, despite the abuse.

Sumagaysay’s email specifically refers to Lee’s allegations that Haen demanded that Lee fire a communications analyst because the analyst refused to follow Haen’s order to share social media log-in codes with the police department after then-City Manager Mike Malone directed the analyst not to. 

It also refers to Lee’s allegations that Haen ordered then-interim assistant to the city manager Natalie Peterson to submit forged and backdated documents to the U.S. Department of Housing and Urban development and to delete text messages about housing and homelessness that were part of the public record.

However, Solano County Superior Court Judge D. Scott Daniels found that the alleged facts in Lee’s lawsuit either did not have sufficient bearing on Shepard-Hall’s claims or they could have been revealed through investigation or discovery prior to the settlement agreement. The judge later granted the city’s request to enforce the settlement agreement without further negotiation.

Shepard Hall’s settlement amount of $130,000 is sharply contrasted by the nearly $3 million in settlements reached by three other city employees who claimed that the city wrongfully terminated them for whistleblowing activity. The employees had reported allegations that former City Manager Greg Nyhoff pushed through sweetheart deals with developers at the expense of the city and that he created a culture of abuse at city hall. 

Former assistant to the city manager Johanna Altman settled her claim in the three employees’ combined lawsuit for $1,000,000 last year. Former city special advisor Slater Matzke and former assistant to the city manager for economic development Will Morat settled with the city for $1.85 million between the two of them.

Matzke and Morat’s claims were scheduled to go to trial in October 2024 but the two settled just weeks before Matzke’s wife, Andrea Sorce, was elected mayor of Vallejo. 

Morat and Shepard-Hall’s claims both relate to a series of incidents involving the treatment of a former housing supervisor who is an African-American woman. Morat alleged that Shepard-Hall had harassed the supervisor, but Shepard-Hall claimed that Morat wanted to replace her with the supervisor.

According to Morat’s lawsuit, he and the housing supervisor had attempted to attend a meeting run by Shepard-Hall, but when they arrived, Shepard-Hall told Morat to have the supervisor leave because the meeting was for upper management. 

Morat alleged that the supervisor had previously come to him several times seeking advice on how to handle Shepard-Hall’s abusive behavior toward her. 

Morat emailed city officials to report the incident at the meeting and what he believed was ongoing abuse of the supervisor by Shepard-Hall. He also emailed other employees about his concerns regarding the incident. 

When Matzke and Altman learned about the incident, they recommended that the supervisor report the incident to the human resources department as race discrimination. Morat accompanied the supervisor to make the report, according to the lawsuit. 

In Shepard-Hall’s lawsuit, she claimed that since the beginning of her employment with the city, Morat had excluded her from meetings and worked to undermine her authority because he wanted the housing supervisor, who he had originally hired, to serve in Shepard-Hall’s position. Shepard-Hall alleges that she complained to Nyhoff about Morat’s harassment but the behavior continued.

In Nyhoff’s deposition for the Matzke, Morat and Altman lawsuit, Nyhoff claimed that he placed Morat on administrative leave in part because he had inappropriately discussed personnel matters related to Shepard-Hall in his email to other city employees. 

Shepard-Hall alleged that Nyhoff did nothing to address her complaints that she was being harassed by other city employees. She also alleged that Nyhoff made comments to her about race indicating that discrimination played a role in his behavior toward her. 

Shepard-Hall alleged that Nyhoff told her to remove a Zoom background of Major League Baseball’s 100-year anniversary logo of the Negro leagues and that he had not seen Black people for 30 years of his life. Later, Shepard-Hall was asked by department leaders to sign a letter attesting that Nyhoff was not a racist. She claimed that she agreed to sign the letter out of fear of retaliation.

Prior to the city’s settlement negotiations with Shepard-Hall, the city argued that she was unlikely to succeed on her claims because an independent investigator found a number of performance issues, including a backlog of 800 housing inspections, poor oversight of contractors at Project Roomkey and a failure to communicate with other departments, which led to costly delays of the Navigation Center project.

Shepard-Hall refuted many of the claims, asserting the city had focused the blame on her department when the issues had existed prior to her tenure or were the result of broader organizational problems that affected many departments.