Two former employees with the city of Oak Harbor have made claims alleging that the city owes them large sums of money because of the actions of Mayor Scott Dudley.

Former Oak Harbor Police Chief Rick Wallace filed a lawsuit against the city in Island County Superior Court last month claiming wrongful termination and breach of contract. Wallace first filed a tort with the city, a step that must be taken before a lawsuit, in July. He asked for $550,000 in lost wages and benefits.

Former City Engineer Eric Johnston filed a claim for damages with the city last Tuesday, which was his last day of work. He is claiming that Dudley created a hostile work environment and forced him to find work elsewhere. He is asking for $300,000 in damages.

Oak Harbor attorney Christon Skinner represents both Wallace and Johnston.

Dudley, however, said the claims are baseless. He said he consulted with attorneys before he fired Wallace and did nothing improper that wasn’t within his authority.

“I’m looking forward to being vindicated in court,” he said.

Dudley promised change in last year’s mayoral campaign. When he came into office in January, he promptly fired the city administrator, the city attorney and the fire chief. In the lawsuit, Skinner writes that Dudley fired the officials “for political reasons and in furtherance of campaign promises that he made to his political supporters.”

Dudley counters that he made no promises to fire or hire anyone.

Dudley said he urged Wallace, a longtime member of the police department, to retire. The claim says Wallace initially agreed, but then concluded that he could not be forced to retire because of his “for cause” employee status.

The issue of whether Wallace is a “for cause” or “at will” employee is at the heart of the lawsuit. Skinner argues Wallace was a for-cause employee because of a description in the city’s personnel policy manual. In addition, Wallace was never presented an employment contract and didn’t receive a severance packages as other fired at-will employees have.

Dudley, on the other hand, said the former and current city attorneys advised him that Wallace was an at-will employee and could be fired without cause. Wallace’s original claim was sent to the Washington Cities Insurance Authority, which is essentially the city’s insurance company. A senior adjustor denied the claim, concluding that city code states that the police chief serves at the discretion of the mayor.

“The mayor exercised his authority under the municipal code in terminating your client’s employment,” Senior Adjustor Gordy Van wrote to Skinner.

After Wallace refused to retire, City Council members proposed a new section of city code that would “grandfather” Wallace and Rosen in as “for cause” employees. Four days before the council was scheduled to approve the measure, Dudley fired Wallace.

As for Johnston, Dudley has been critical of him even before becoming mayor. Dudley was a critic of the project that converted Pioneer Way into a one-way thruway and ended up being very costly after Native American cultural remains were discovered under the blacktop.

As city engineer Johnston was involved in the project, though he wasn’t the project manager; he was, however, among the city officials who had not responded to a warning from Department of Archaeology and Historic Preservation about the likelihood of such an inadvertent find.

In the claim for damages, Skinner writes that Dudley “made numerous attempts to manufacture ‘cause’ to terminate Mr. Johnston’s employment.”  When that failed, Dudley allegedly tried to make Johnston’s job unbearable.

The claim alleges that Dudley personally launched repeated investigations into current and past projects that Johnston was involved in, without the knowledge of the city administrator, the human resources director or Johnston’s supervisor, in violation of the city’s employee handbook.

In addition, Dudley allegedly repeated public statements of an untrue and disrespectful nature about Johnston; berated him in the workplace, in public and in publications; excluded him from communications and meetings pertinent to his job; reassigned him without notice or justification of Johnston’s primary job responsibilities, the claim states.

“The actions of the mayor left Mr. Johnston no choice but to seek other employment and resign from employment with the City of Oak Harbor,” the complaint states. “This decision was made solely as a result of Mayor Dudley’s threats to terminate Mr. Johnston’s employment and the mayor’s related, harassing behavior.”

The complaint indicates that Johnston took a job in Bellingham. His complaint was sent to the Washington Cities Insurance Authority for consideration.

Dudley said he doesn’t expect to settle, but the city won’t have to pay no matter what happens. The insurance authority would pick up the bill.