Former finance director files claim alleging age discrimination against city of Newport Beach

A former Newport Beach finance director filed a claim against the city, alleging he was terminated without cause last year.

Dan Matusiewicz assumed his last position with the city in 2012, but was employed by the city beginning in 1992. He served as the city’s finance director until Nov. 2.

In a claim filed on his behalf, his attorney Dennis Wagner alleged that the city put Matusiewicz on administrative leave in October for “no legitimate reason.”

The claim alleges City Manager Grace Leung targeted older employees with the city, “potentially with a goal in mind to reduce costs, avoid paying benefits, or churn employees with higher pension benefits for lower tiered pension benefits.”

Wagner said the claim was self-explanatory.

“No reasons were ever given to him for being let go, but his age could also be a factor as it seems the city manager was more concerned about when people were going to retire then being focused on running the city,” Wagner wrote in an email Friday.

Leung denied the accusations listed in the nine-page attachment detailing Matusiewicz’s account filed on April 30, arguing that there is no factual basis and pointed to a short list of city employees of varying ages and positions included in the claim.

“Claims have been made that employees were targeted based on age,” Leung said in an issued statement.

“Of the listed employees, only the claimant has been terminated. The entire management team that reports to me is over the age of 40 and I have personally hired two harbormasters, promoted a fire chief, and hired a finance director who are all over the age of 40.

“To say that I am biased against people based on age is simply not supported by the facts. The termination of the claimant was justified for a variety of legitimate business reasons and I stand behind my decision.”

In his claim, Matusiewicz said the root of the issue dates back to March 2019 when word circulated that another employee — not Matusiewicz — was ready to retire.

When that employee didn’t, Matusiewicz alleges that “Leung became agitated and increasingly hostile toward Matusiewicz and started to obsess over finance staff members and their work and ages.”

He claims that Leung had a “hostile, but unsubstantiated view of productivity” for several employees. The claim further states that Leung did not accept Matusiewicz’s assertions that the purchasing and warehouse arm of the city was insufficient for the size and scope of Newport Beach. Requests for greater staffing were denied.

In December 2019, an independent audit was conducted by Moss Adams. A draft audit report presented by the firm in April last year identified the purchasing unit of the city to be a “high-risk” area of concern and recommended the hiring of additional staff.

The claim goes on to allege that the finance department was not included in “private meetings” between Moss Adams, Leung and the deputy assistant city manager that followed the release of the draft.

Matusiewicz further accuses Leung of coercing auditors to remove the recommendation from the draft report.

According to the claim, Moss Adams was also set to evaluate the warehouse operations when Assistant City Manager Carol Jacobs was assigned to perform the audit instead.

That audit was completed and distributed in September last year, but Matusiewicz alleges that Leung added revisions to the final report that state there was a lack of appropriate management.

“[Matusiewicz] had protested [Leung] overriding an outside audit because she wanted a different outcome and he objected,” Wagner said.

“His legitimate concerns over the audit being changed without facts must have led to this outcome but he was engaged in protected activity which is a violation of his rights.”

Matusiewicz said his personnel evaluation occurred three months earlier than normal and that the final score was significantly lower than previous reviews he had been given.

He is seeking reimbursement for the mandatory employee contributions to the Retiree Health Savings plan; damages for emotional distress, pain and suffering within the purview of Orange County Superior Court; special damages to be determined for wage loss; and punitive damages “as necessary to punish individuals who violated the rights of Matusiewicz with malice, fraud and oppression.”

In a statement, Newport Beach Mayor Brad Avery said he takes claims against the city very seriously but felt that he has not seen any discriminatory behavior at City Hall.

“As city manager, Ms. Leung has a duty to lead the organization and I think she has done an excellent job of ensuring that employees are treated fairly and that a culture of intolerance is not allowed to develop,” Avery said.

City attorney Aaron Harp said Friday that the city is currently in the process of formally rejecting the claim.

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