Separation deal limits what Palmer officials can tell former manager’s future employers

PALMER — A separation agreement between Palmer and former City Manager Stephen Jellie blocks officials from sharing with any of his potential future employers details of Jellie’s resignation or brief but tumultuous tenure as Palmer’s administrative leader.

Jellie resigned last week after the city attorney warned that his personnel practices put Palmer at “imminent risk” of lawsuits. He was hired in August and held the position for 53 days.

Jellie will receive a $75,000 severance payment as required by his employment contract, Palmer Mayor Steve Carrington said last week. Jellie resigned during an emergency city council meeting last Wednesday that included a nearly three-hour closed session. His resignation was effective immediately, Carrington said at the meeting. The settlement with Palmer marks Jellie’s third such resignation in less than two years.

The agreement prevents Jellie and the city from suing each other for any employment violations or financial losses and limits what Palmer officials can tell Jellie’s potential future employers about the circumstances of his departure, according to the draft agreement presented during the closed session.

The city “agrees that if contacted by potential employers as to the employee’s suitability for employment, that city will disclose … that the city and employee reached a mutual decision that his employment terminated due to a difference in management styles,” the document states.

The agreement also prohibits Jellie from making any statements or taking any actions that could harm the reputation of Palmer or its officials.

“Employee agrees not to take any action or make any statement that is disparaging of or designed to undermine the reputation of the city, including but not limited to its officials, its employees, or job applicants, past, present, and future,” it states.

The document was drafted by an attorney unaffiliated with the city, Carrington said. It was created before Wednesday’s closed session and without input from the council, council members said in interviews this week.

Palmer officials did not respond to a request for information Monday about who prepared the document or when it was drafted. A signed copy of the agreement was not immediately available.

Jellie’s resignation follows accusations by Palmer public safety staff that he was cutting their resources and downsizing their departments. When employees raised concerns to other staff members or city leaders, Jellie implemented a strict chain-of-command structure that prevented individuals from contacting the city attorney or speaking with council members, both city employees and City Attorney Sarah Heath said during a council meeting early last week. Jellie also placed Palmer Police Chief Dwayne Shelton on two weeks’ administrative leave for questioning those decisions, Shelton told the council during the meeting.

Jellie strongly disagreed with the characterizations of his actions, saying any steps he took to consolidate resources or manage staff were requested by the council.

“It’s also interesting to me that you’re holding me accountable for doing research and work on things that you asked me to do,” he said in remarks to the council before the closed session Wednesday. “I didn’t hear any of you stand up last night and say, ‘We told the manager to work on these things.’ I didn’t hear any of you say, ‘Hey, the manager’s been asked to look at all these functions.’”

As of Monday, no interim city manager had been named. Shelton remains on administrative leave because city policy requires the city manager to end such leave orders, Carrington said last week. The manager’s position will remain vacant until the city council meets on the matter, he said. Such a meeting has not yet been scheduled, according to the city’s website.

An emergency meeting to select an interim manager was scheduled for Tuesday evening and was added to the city schedule that morning. As in past special and emergency council meetings, the agenda includes time for public comment but does not include a report from the city attorney or closing remarks from council members.

Jellie said he appreciated the opportunity to work in Palmer.

“I appreciate the Palmer City Council giving me the opportunity to help them address the needs and challenges of the city, even for this very short time,” he said in a statement Thursday. “I had hoped to do more.”

Jellie has previously resigned from similar positions with large severance packages. Earlier this year, he received $75,000 as part of a resignation agreement in Teton County, Wyoming, where he served as fire chief. In late 2022, he received $50,000 to resign as city manager of Ogdensburg, New York.

As in Palmer, Ogdensburg officials are prohibited from disclosing anything that could “negatively reflect” on Jellie’s character or employment with the city, according to his buyout agreement.

A request for a copy of Jellie’s separation agreement with Teton County was denied by a county clerk, citing employee privacy.

Palmer City Council members said they were unaware of Jellie’s employment history before hiring him because city human resources officials prohibited them from researching his past and did not provide them with his employment background.

An “interviewing reminders” document was sent to council members prior to their initial meeting with Jellie and other candidates. The document instructed members not to “search online for information about the candidate,” including on Facebook, LinkedIn or “any type of internet search.” It was not immediately clear who wrote the instructions. Heath, the city attorney, said she was not involved in their creation.

An August request for a copy of Jellie’s employment background check conducted for Palmer was denied by Heath, who cited employee privacy rules.

The next regular meeting is scheduled for Oct. 22. An agenda for that meeting has not been released.

Republished with permission from the Mat-Su Sentinel, an independent, nonprofit, nonpartisan online news source. Contact Amy Bushatz at abushatz@matsusentinel.com.

[Editor’s note: This story was updated Oct. 15 to reflect the date and time of a newly scheduled emergency meeting of the Palmer City Council.]