Michigan House votes to limit state severance deals

Capitol building in Lansing, Michigan.  (AP Photo/Carlos Osorio, File)
Capitol building in Lansing, Michigan. (AP Photo/Carlos Osorio, File)

LANSING, Mich. – The Michigan House voted unanimously Tuesday to curb the size of severance deals for state officials unless they limit the state's legal exposure and details are made public.

The move came after Democratic Gov. Gretchen Whitmer's administration faced scrutiny over $85,000 and $155,000 payouts made to her former health and unemployment directors.

Under legislation sent to the Senate, state employees would be limited to 12 weeks of severance pay unless the attorney general determines a higher payment “is necessary to serve the best interests of this state based on the risk of litigation and the need to minimize the expenditure of public funds.” A separation contract would also, to the extent allowed by law, have to shield the state from a potential lawsuit.

Public officers — lawmakers, other elected state officials and appointees — could get no severance pay unless it would contain legal costs and bar a lawsuit. The deal could not include a nondisclosure provision unless confidentiality is required by law.

Such agreements could not prohibit officers and employees from disclosing factual information about an alleged violation of law, the existence of the contract or the full text of the deal. Any agreement that pays six weeks or more of severance would be posted on the state or legislative websites within 28 days.

Severance packages for former Department of Health and Human Services Director Robert Gordon and ex-Unemployment Insurance Agency Director Steve Gray “were really outrageous,” said the bill sponsor, Republican Rep. John Roth of Traverse City.

“Our citizens expect better than that," he said.

In March, Whitmer set policies regarding severance agreements with executive branch employees, specifying that the state cannot agree to deny the existence of a deal or withhold its details. Her directive also allows payments for something other than services rendered if the worker waives potential legal action, and the state determines it will mitigate financial risk and protect taxpayer money.

But she also said nondisclosure or confidentiality provisions can be used to shield information related to an “employment decision or dispute, including but not limited to the circumstances of the departure.”

The Legislature, which has paid nearly $700,000 as part of 30 severance agreements and three legal settlements over 10 years, has not disclosed details.

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