A Severance Clause If the Employee Voluntarily Quits

We now reach an amazing contract, and cheers to the employee who managed to get the deal described below for himself.

The LNC uncritically swallowed the most astonishing feature of the supposed contract. I refer to the severance clause. It is not unknown for employment agreements to include a severance clause, under which the employer pays the employee a penalty if the employer chooses to discharge the employee without having good reason. A normal severance clause, however, refers to the case in which an employee leaves his employer involuntarily. The contract for Willis, as released by John Famularo, had a severance clause giving Willis six month’s pay if he were involuntarily discharged without cause, three months if he were discharged with cause, and a third severance clause.

The third clause, the one that was invoked, was that rarest of birds, a severance clause in which the employee is paid because the employee voluntarily leaves for other pastures. If Willis left voluntarily, he got a golden parachute: a half-year’s severance pay. My contacts in the private sector say “There’s no such thing!”. The presence of such a clause, virtually unknown in private commercial circles, should raise the most serious questions. Why was one offered here? There are vast numbers of commercial publicists and political managers on the market, many of whom will push Libertarianism with the same enthusiasm and consummate skill they used to sell soap. What unique skills did Willis bring to his employer, the Libertarian National Committee? Or, as critics might suggest, did the voluntary resignation clause reflect previously-established plans relating to the 2000 campaign, plans that would permit Willis to work nearly full time for Browne while the National Committee paid his salary? The latter alternative would require that a degree of foresight had for once been applied to Libertarian political campaigning.

Furthermore, why did the LNC accept that such a contract was valid, after it had without the National Committee’s knowledge allegedly been signed? At the time, no LNC member questioned the legitimacy of a secret contract, let alone when the contract had actually been written and signed.

The secret contract appears to have had a profoundly damaging impact on the National Party even while Willis was still on the payroll. The core difficulty was that many issues impinged on how much Willis would be paid under his contract. The LNC didn’t know that Willis had a financial interest in their decisions, on which Willis had direct input because he had the privilege of participating in LNC meetings.

In a late August 2001 message from Joe Dehn to Steve Givot, forwarded by Dehn to lpus-misc, Dehn explains:

“…For THREE YEARS the LNC was operating without the knowledge that its top employee was protected by a secret deal that would have cost the party what was then an amount it could not afford to lose if he was crossed. The rest of the LNC did not know this, _but Dasbach did_. Please note, if it is not already obvious, that this period spanned the entirety of the Willis/Browne work controversy, including the period when Dasbach ‘interpreted’ the office-neutrality rule in such a ridiculous way and all the inaction which followed.”

That is, the secret contract put Willis in a position from which he could dictate which policies the National Party would follow with respect to the Browne campaign. If Dasbach did not follow Willis’s policies, and instead removed Willis, the National Party might well suffer unbearable financial penalties. If Willis simply resigned, the National Party would owe Willis a half-year’s salary that they could not readily afford to pay. In the end, from the externally-available evidence, Willis was allowed to do what he wanted.

Finally, Dehn also makes a further extremely serious accusation in his June 18 statement, an accusation that was not widely recognized by Party members who saw his remarks. Libertarian National Committee, Inc. is a corporation with a balance sheet. That balance sheet is regularly audited. Dehn claims—and the author has every reason to believe that Dehn is telling the truth—that the LNC was not informed of these obligations to Willis until it came time to pay them. By inference, the obligations did not appear on the balance sheets, in which case the audits were based on information that should have been known to be false and misleading by at least some persons responsible for informing the auditors. Furthermore, the LNC was making decisions based on financial information, notably the balance sheets, that were known to be false and misleading by at least some people who were regularly present at LNC meetings and permitted to speak. However, none of these people spoke up. [As an aside, I know of no evidence that LNC National Treasurers Hugh Butler and Mark Tuniewicz knew of the secret contract or failed in their duties with respect to this issue.]

When the LNC was informed of the alleged secret contract, the LNC did not take action against any of the officers or employees who had apparently misled it and its auditors. Instead of disciplining or removing the responsible persons, the LNC let matters pass. The LNC had already lost control of the Party once when it let Perry Willis get away with his 1995 statement “…Sharon Ayres is his friend and (he) would give her advice if asked but that does not constitute conflict of interest.” By accepting that the alleged secret contract with Willis was valid the LNC again lost control of the National Party.