The 1st District Court of Appeal denied JEA’s request to keep its legal complaint against fired former CEO Aaron Zahn out of arbitration.
In his opinion released Aug. 24, Judge M. Kemmerly Thomas upheld the 4th Judicial Circuit Court ruling denying JEA’s motion to halt arbitration of Zahn’s possible post-termination compensation.
The JEA board of directors voted in January 2020 to terminate Zahn with cause after an employment investigation detailed his role in the 2019 effort to offer the public utility for sale to a private company.
JEA’s complaint alleges that Zahn committed fraud, breached his fiduciary duty and the public trust as CEO and misrepresented the terms of his employment agreement to the board.
The lawsuit filed June 5 includes six counts and contends Zahn made false statements to the JEA board regarding JEA’s financial outlook as “part of a fraudulent scheme to effectuate the sale of JEA (a publicly owned utility) to the private sector in order to reap a personal windfall,” the appellate decision states.
That employee bonus plan promoted by Zahn was squashed when its potential $1 billion impact on the utility was revealed.
The appellate opinion says 1st District Court Judges Susan L. Kelsey and Ross L. Bilbrey concurred with the opinion.
JEA issued a statement Aug. 25 about the ruling:
“As we have previously stated, JEA believes Aaron Zahn’s challenge should be decided in a transparent court proceeding, not through arbitration. The JEA board terminated Mr. Zahn for cause. JEA Managing Director & CEO Jay Stowe and the new leadership team continue to work toward building the best utility in the nation.”
The lawsuit was filed on behalf of JEA by Lee Wedekind III of Nelson Mullins Riley & Scarborough and the city Office of General Counsel.
Associate Editor Max Marbut contributed to this report.