CUC sues its chief engineer Riegel

The Commonwealth Utilities Corp. filed yesterday a lawsuit against its chief engineer, John Riegel, over his amendment of a contract, which would extend the term of his contract, increase his annual salary, and that he could not be terminated for cause.

CUC, through counsel James S. Sirok, is suing Riegel in the Superior Court for invalid provisions of contract.

Sirok asked the court to hold a conciliatory session to resolve the issue of the legality of the amendment provisions complained.

Sirok requested the court to declare that the amendment provisions complained are invalid and not enforceable against CUC.

According to Sirok in the complaint, in June 2014, CUC, through its authorized representatives, and Riegel executed a contract for the purpose of employing Riegel at CUC as a chief engineer.

The terms and conditions in the contract were discussed and agreed upon by both the CUC executive director, on behalf of CUC, and Riegel prior to the execution of the documents by the parties.

Pursuant to the terms of the contract, Riegel would be paid an annual salary of $131,840, and the contract would expire on July 16, 2016.

Pursuant to a provision of the conditions incorporated into the contract, the contract was neither automatically renewable nor did it create any option to renew the contract.

Sirok said it was wholly within the discretion of CUC as to whether an offer to renew the contract should be made to Riegel.

Further, Sirok said, CUC did not have the obligation to provide Riegel with advance notice of termination of employment upon completion of the term of the contract.

Pursuant to a provision of the conditions incorporated into the contract, the lawyer said, CUC could terminate the employment of Riegel at any time during the term of the contract for cause upon at least seven days advance notice.

He noted that a “termination for cause” provision is contained in all contracts executed by CUC for the employment of individuals employed as full-time employees.

In July 2015, the employment contract of Alan Fletcher, as CUC’s executive director, expired.

During a period of time in late June 2015, Sirok said, discussions and negotiations were conducted between Riegel and various members of the CUC Board of Directors for the purpose of requesting Riegel to assume the responsibilities as acting executive director of CUC in the absence of a permanent executive director.

Sirok said at no time was CUC’s legal counsel in attendance or a participant to the discussions and negotiations.

Sirok said as a result of the discussions and negotiations between the various CUC board members and Riegel, it was agreed that Riegel would assume the role of acting executive director, and, at the same time, continue with his responsibilities as chief engineer for CUC.

Sirok said it was further agreed that Riegel would get an increase in salary during the period of time he assumed the duties of acting executive director equal to $150,000 per year and that his employment with CUC during the term of the contract (up to July 16, 2016) would not be terminated based on his performance as acting executive director.

During a board meeting held on June 30, 2015, the board appointed Riegel to assume the role as acting executive director of CUC for a period of 150 days or until such time as an executive director is hired, or until Riegel decided that there was too much that he needed to do in engineering and could no longer assume the role of acting executive director, whichever came first.

Sirok said subsequent to June 30, 2015, and during the period of time when Riegel was the acting executive director during the absence of executive director Fletcher but before Fletcher’s contract expired, Riegel took it upon himself to type up a document identified as amendment 1 to contract.

Sirok said Riegel did not consult with CUC’s Office of Human Resources or utilize staff of the office for this purpose.

Sirok said the second page of the amendment contains provisions, which are not in line with the agreement reached between Riegel and various board members, and were not even discussed, during the discussions and negotiations.

The lawyer said at no time during the discussions and negotiations between Riegel and various board members did any agreement take place which would extend the term of Riegel’s contract as chief engineer through July 2018; increase his annual salary as chief engineer from $131,840 to $140,000 between July 16, 2016 and July 15, 2018; and delete a paragraph of the conditions such that his employment with CUC as chief engineer could not be terminated for cause.

Sirok said that on July 8, 2015, rather than having the amendment routed through the signatory chain by the Office of Human Resources, Riegel, as acting executive director, then hand carried the amendment to the various CUC signatories to obtain their signatures.

Sirok said when the amendment was presented to CUC’s legal counsel and board chairwoman, Page 2 of the amendment was not included.

Sirok said neither the chairwoman, nor the board, nor any other binding signatory for CUC, approved or agreed to the terms and provisions on Page 2 of the amendment.

Sirok asserted that the provisions are invalid and are not legally enforceable against CUC.

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Ferdie De La Torre | Reporter
Ferdie Ponce de la Torre is a veteran journalist who has covered all news beats in the CNMI. Born in Lilo-an, Cebu City in the Philippines, De la Torre graduated from the University of Santo Tomas with a bachelor’s degree in journalism. He is a recipient of many commendations and awards, including the CNMI Judiciary’s prestigious Justice Award for his over 10 years of reporting on the judiciary’s proceedings and decisions. Contact him at ferdie_delatorre@saipantribune.com

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