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Gunn v. Senior Services of Northern Kentucky

United States District Court, Eastern District of Kentucky, Northern Division, Covington

March 10, 2015



David L. Bunning, United States District Judge.

Defendant Senior Services of Northern Kentucky ("SSNK") moves for summary judgment on Plaintiff Barbara Gunn's ("Gunn") gender discrimination claims, brought pursuant to Title VII of the federal Civil Rights Act and its Kentucky counterpart, KRS § 344.040. SSNK argues that the decision to terminate Gunn was based on a legitimate, nondiscriminatory reason; namely, that Gunn's performance as Executive Director was unsatisfactory. Further, SSNK contends that Gunn is unable to show that its proffered reason was merely a pretext for unlawful discrimination. Based on the foregoing, and pursuant to the McDonnell Douglas burden shifting framework, SSNK submits that it is entitled to judgment as a matter of law. The Court has diversity jurisdiction over this matter pursuant to 28 U.S.C. § 1332.

I. Factual and Procedural Background

SSNK is a non-profit corporation with its principal place of business located in Covington, Kentucky. (Doc. # 40 at 3). Its mission is to enable senior citizens to live dignified, independent lives, and to prevent premature institutionalization. (Id.) SSNK's programs provide meals, transportation and wellness services to seniors across the following eight counties in northern Kentucky: Boone, Campbell, Carroll, Gallatin, Grant, Kenton, Owen, and Pendleton. (Id.) It also operates ten (10) Senior Activity Centers, which offer health screenings, exercise classes and other daily activities. (Id.) SSNK is governed by a sixteen (16) member, volunteer Board of Directors (the "Board"). (Id.)

Gunn is a resident of Ohio. (Doc. # 1 at 1, ¶ 1). She was hired as Executive Director at SSNK in September 2000, with a starting salary of $80, 000 per year. (Doc. # 40 at 3). By January 1, 2007, Gunn's salary had gradually increased to $108, 500, due in part to merit-based raises. (Id.) Throughout her tenure, which ended when she was dismissed in January 2012, Gunn was the highest ranking employee at SSNK and reported directly to the Board. (Doc. # 46 at 4).

Under Gunn's leadership, SSNK began to incur monthly operating deficits during fiscal year 2007.[1] (Doc. # 40-2 at 1). It continued to struggle in 2008, reporting an eleven-month deficit of $185, 000 and projecting an annual loss of $200, 000. (Doc. # 40-3 at 1). SSNK experienced similar results in fiscal years 2009, 2010 and 2011.[2] In order to fund these deficits, it was required to take distributions from a related entity, Senior Citizens of Northern Kentucky, Inc. ("SCNK"), which holds an endowment for the benefit of SSNK. (Doc. # 40 at 4; Doc. # 40-5 at 3). To further alleviate budgetary constraints, both Gunn and the VP of Finance agreed to reduce their salaries in November 2010. (Doc. # 43-1 at 99-100).

SSNK's financial struggles have been a constant area of concern for the Board. At numerous Board meetings from 2008 on, all of which Gunn attended, members repeatedly stressed the importance of achieving a balanced budget, despite recent and significant cuts in program funding.[3] The Board also emphasized that the endowment should not be regularly used to fund SSNK, and consistently challenged management to develop a self- sustaining business model going forward.[4]

Board Chairman Melissa Lueke ("Lueke") placed this responsibility on the shoulders of her Executive Director. In an email to the Executive Committee on September 15, 2010, Lueke explained that she had previously "asked [Gunn] to be in a position to have a balanced budget to present at the Board Meeting on 9/22, " but that Gunn had failed to do this. (Doc. # 40-4 at 2). Lueke stated that she would meet with Gunn and "set the expectation that [she] have a plan for a balanced budget and an organizational structure that will support the delivery of quality services by 9/30." (Id.) Lueke further noted that if "[Gunn] is not in a position to deliver this on 10/1, we, the executive committee, are going to have to start making the decisions for [her]." (Id.)

Despite Lueke's directives, little had changed by the end of fiscal year 2011. The urgency of SSNK's financial situation was recognized at a combined meeting of the Finance and Executive committees on May 25, 2011. (Doc. # 54-7). Members noted that SSNK was "in its 4th year of an operating deficit and need[ed] to operate as a viable business at a break even point on its own." (Id. at 2). Again, the idea of using the endowment to fund SSNK's operations was discussed, but members cautioned that "foundations should not give funds to organizations without sound finances, and SSNK should be a worthy investment for SCNK." (Id.)

In July 2011, Gunn sent Lueke a memorandum entitled "FY 2012 Goals." (Doc. 54- 8 at 1). Not surprisingly, the first item on Gunn's list was to "manage a balanced budget." (Id.) However, after just one quarter of operations in fiscal year 2012, SSNK had already amassed a deficit of $92, 000. (Doc. # 54-10 at 1). As a result, during a meeting in October 2011, the Board reiterated that "[e]xpectations are for management to build a sustainable business model so SSNK operates at a surplus, not a deficit." (Id.)

Upon receiving revised financials for 2012, which projected an annual deficit of $164, 000, Lueke scheduled to meet with the Executive Committee in November 2011 to discuss the "budget and our leadership." (Doc. # 40-7 at 1) (Doc. # 43-1 at 129). A month later, she called for a second meeting in order to "take formal action to effect a change in SSNK leadership." (Doc. # 40-8 at 1). During a conference call on December 21, 2011, the Executive Committee decided to terminate Gunn's employment, and Lueke arranged to meet with her the following week. (Doc. # 41-1 at 22).

Lueke asked for Gunn's resignation on December 27, 2011, explaining that the Board had lost confidence in her ability to lead the organization. (Doc. # 43-1 at 146). When pressed for specific reasons, Lueke added that Gunn was unable to make decisions without the assistance of Board members or outside consultants, and also noted that she had failed to consolidate SSNK's offices. (Id.) Gunn was given a severance agreement and told that she had until January 23, 2012 to sign it; otherwise, the offer would be withdrawn and her employment would be terminated immediately.[5] (Id. at 146-47).

On January 23, 2012, Gunn wrote to her staff and certain members of the SSNK and SCNK Boards, stating, "I have been told that my performance has not met the expectations of the Board and that the Board has lost confidence in my ability to lead the organization."[6] (Doc. # 40-10 at 1-2). Gunn explained that she had been offered a severance agreement in exchange for her resignation and confirmed that she would not be accepting it. (Id.) The Board called a special meeting the next day and unanimously voted to terminate Gunn's employment, effective immediately. (Doc. # 40-11 at 1). Shortly thereafter, Gunn received a letter from the Board confirming its decision. (Id.)

After terminating Gunn, the Board named Director of Programs Ken Rechtin ("Rechtin") as Interim Executive Director. (Doc. # 40 at 6). Rechtin immediately assumed Gunn's prior responsibilities, but retained his original salary of $70, 000 and continued to fulfill his duties as Director of Programs as well. (Id.; Doc. # 42-1 at 7). He informed the Board that he could serve only as a temporary replacement because he intended to pursue other options in the future. (Doc. # 41-1 at 21). Rechtin remained in this dual position until June 2014, ...

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