In a letter sent Jan. 13 to the city Office of General Counsel, former JEA CEO and Managing Director Aaron Zahn’s attorney contends that on Dec. 30 Zahn accepted the severance terms presented by JEA’s board of directors on Dec. 17.
That was the day the board fired Zahn. The letter is from John Mullen with Phelps Dunbar in Tampa.
It also states that since the board has not acknowledged Zahn’s agreement to “forego most of the contractual benefits” in his employment agreement with the utility, “Mr. Zahn’s personal and professional reputation are being publicly harmed by unfounded and categorically false accusations in the media.”
The board voted 5-1 to terminate Zahn “without cause” and placed him on administrative leave, paid at $10,000 a week, until the terms of his severance are settled.
The board also voted to offer Zahn an amended settlement package that would reduce the amount of the “without cause” termination settlement required in his contract.
Zahn’s contract calls for $842,925 in payments in the event of termination without cause. That includes 20 weeks of pay, based on his annual $520,000 salary; a 12-month consulting contract worth $634,000; and COBRA insurance payment benefits.
Zahn did not attend the Dec. 17 meeting and was represented by Jacksonville attorney Jacob Peek, who advised the board that he would be unable to contact his client that day to discuss the reduced offer.
The board set a Dec. 30 deadline to complete negotiations with Zahn to agree on a settlement package.
On Jan. 2, the Office of General Counsel reported that negotiations were continuing, so the board scheduled a special meeting for Jan. 7. That meeting was postponed to allow city attorneys to determine whether grounds exist to terminate Zahn with cause, which would disqualify him from receiving severance benefits.
Mullen’s letter attached an email he sent at 6:53 p.m. Dec. 30 to Deputy General Counsel Sean Granat and to Peek. The email states that Zahn “has accepted in full the terms of the offer resolved by the Board at the Dec. 17, 2019 meeting.”
The terms comprise:
• Termination “without cause” effective immediately upon amendment and execution of the settlement agreement.
• Reducing the term of the consulting period from 12 months to one month, cutting the consulting payout from $634,000 to about $52,800.
• Zahn’s waiver of the 30-day notice period for termination required by his employment agreement and waiver of the retention agreement.
Mullen advised the Office of General Counsel:
“Zahn’s commitment is contingent upon JEA signing and returning an executed Separation and Transition Agreement and Mutual Waiver and Release Agreement consistent with the Employment Agreement and the terms of the Dec. 17 offer before 5:00 p.m. this Friday, January 17, 2020.”
If JEA fails to meet the deadline, Zahn’s offer to accept the reduced settlement will terminate and he will pursue termination for “Good Reason.”
City attorneys would have 30 days from Jan. 13 to respond to that action, under the terms of Zahn’s contract.
Mullen states that Zahn “did not make the decision lightly to forego most of the contractual benefits in the Employment Agreement” and “Mr. Zahn has always conducted himself in a way that demonstrates he wants the best for JEA and the community.”
Mullen further stated:
“We are a law firm in Tampa and have been watching the clear handwringing and scapegoating from many in the JEA Community. This is not healthy for JEA, JEA’s employees, Mr. Zahn, or the broader community. It is clear that the only motivating force that exists is a series of policy decisions that have become deeply unpopular. The facts, televised meetings, and voluminous documents demonstrate Mr. Zahn did not act alone or without proper public notice and authorization.”