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Oregon Department of Corrections tab for lawsuit tops $3 million

Oregon’s Department of Corrections oversees the state penitentiary and more than 10 other prisons.
Oregon Department of Corrections

The agency is on the hook to pay nearly $740,000 for legal costs after two state employees alleged retaliation and won a $2.4 million judgment.

The Oregon Department of Corrections racked up more than $3 million in costs after losing a retaliation lawsuit filed by two employees that largely centered around actions of Heidi Steward, the agency’s interim director.

The state agency accumulated the seven-figure tab after Gina Raney-Eatherly and Merilee Nowak, two policy analysts, sued the state in 2020, alleging they faced retaliation from Steward and Colette Peters, the former agency director who became head of the federal Bureau of Prisons last year.

Raney-Eatherly and Nowak alleged they faced retaliation dating back to 2019.

A Marion County jury awarded the two employees $2.4 million total in April. Last week, a judge approved their attorneys’ request that the agency also pay nearly $740,000 in the employees’ attorney and legal costs. That pushes the entire bill up to more than $3 million.

The award shows the costs for taxpayers when the corrections agency turns a blind eye toward worker concerns or retaliates against employees who report wrongdoing, especially when cases go to court and drag out for years. The size is also significant, as state agencies often try to settle cases for far less.

In a joint statement to the Capital Chronicle, Raney-Eatherly and Nowak said they are happy the case is concluded, but continue to be concerned.

“We are elated by the jury’s verdict and the subsequent award of attorney fees and costs. We are grateful to bring this nearly four-year ordeal to an end,” they said. “Although we appreciate the positive outcome on a personal level, it is disconcerting that accountability seems to be lacking and the behavior that prompted us to file the lawsuit persists within the department for others.”

Jennifer Black, a spokeswoman for the Oregon Department of Corrections, declined to comment.

The employees alleged they faced retaliation after they corrected inaccurate data the agency was preparing for state legislators about the agency in February 2019. For example, they found a presentation prepared for lawmakers had “false and misleading information which exaggerated the number of inmates with substance abuse issues,” the lawsuit said. They passed that information along before lawmakers heard it, but the top brass at the agency told lawmakers the “incorrect and false information,” the lawsuit said.

Afterwards, the employees alleged they faced demotions and a decrease in challenging assignments that matched their level of experience with the agency.

Eventually, Raney-Eatherly was laid off and returned to the agency when another position became available. She was first in line to fill it under state rules that dictate how laid-off employees return to work.

But the former supervisor who re-hired her, Nathaline Frener, alleges in a separate and ongoing lawsuit that the agency’s bosses pressured her to find a way to avoid bringing Raney-Eatherly back to the agency, such as through changing the job description or waiting to post it until after her two-year window eligibility period to be rehired. Instead, Frener told her bosses she would treat Raney-Eatherly like any other employee and warned them their requests were illegal, the lawsuit said.

Raney-Eatherly is still an agency employee, though on a temporary assignment with the Oregon Department of Revenue. Nowak has permanently moved to the revenue department.

The jury awarded Nowak nearly $907,000 and Raney-Eatherly about $1.5 million, a figure that factors in lost wages, decreases in their state pensions and non-economic damages.

The Oregon Capital Chronicle is a professional, nonprofit news organization. We are an affiliate of States Newsroom, a national 501(c)(3) nonprofit supported by grants and a coalition of donors and readers. The Capital Chronicle retains full editorial independence, meaning decisions about news and coverage are made by Oregonians for Oregonians.

Ben Botkin covers justice, health and social services issues for the Oregon Capital Chronicle. Ben Botkin has been a reporter since 2003, when he drove from his Midwest locale to Idaho for his first journalism job. He has written extensively about politics and state agencies in Idaho, Nevada and Oregon.