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Pacifica Foundation can’t dodge $300,000 defamation award for fired executive

by Courthouse News
September 16, 2022: A federal judge confirmed an arbitrator's finding that the former director was defamed by WBAI programmers who said he had been hired to sell the New York City radio station.
LOS ANGELES (CN) — Pacifica Foundation, the owner of five progressive, listener-supported radio stations, lost its bid to vacate a $300,000 arbitration award to a former interim executive director who was fired in 2019 after he had fallen out with the nonprofit's board over his handling of financially troubled WBAI in New York City.

U.S. District Judge Stephen Wilson in Los Angeles today confirmed the arbitrator's decision to award John Vernile damages for defamation even though the arbitrator had agreed with Pacifica that he wasn't wrongfully terminated. Earlier this week, the judge had denied Pacifica's motion to throw out the award, rejecting the nonprofit's argument that the arbitrator had exceeded her power because some the purported defamation occurred after Vernile was fired and none of it "arose" from his employment.

Arthur Schwartz, a lawyer representing Pacifica Foundation, said that the arbitrator's ruling was an affront to free speech and that the nonprofit will appeal the judge's ruling.

"We are in the somewhat absurd position where an arbitrator rules that Mr. Vernile was lawfully fired for his misconduct, that there was no 'whistleblower' retaliation, that he had improperly acted with the consent of only a minority of our board to close a station in New York City and fire its employees, but that after he was fired he was defamed because someone on the radio called him a 'coupster' acting 'with a rogue faction of the board,'" Schwartz said in an email.

Although Pacifica Foundation is absolutely within their right to appeal Wilson's ruling, it's unlikely to succeed and would have to post a $450,000 bond to stay enforcement of the judgment, said Stephen Jaffe, Vernile's attorney.

"Judge Wilson followed the law and came down with the correct decision," Jaffe said Monday in a telephone interview. "The only reasons to overturn the arbitrator's award would have been if she had a conflict of interest or ignored the underlying law."

The conflict that cost Vernile his job centered around WBAI, the original home of the Democracy Now! radio show that focuses on activism and social justice issues. According to court filings, Vernile, who was hired in July 2019, was confronted with a host of dire financial and compliance problems at the radio station. In October of that year, he shut down local programming at WBAI and sent the Brooklyn-based station's staff home.

Vernile's actions caused an uproar and WBAI went to court to stop them. The nonprofit's board, comprised among others of representatives of all five stations, voted to terminate his employment the following month.

Meanwhile, according to the arbitrator's findings, supporters of WBAI had held a rally in support of local programming and in opposition to the shutdown where many prominent New Yorkers appeared.

"Speakers at the rally denounced Vernile, claiming that he was part of a 'rogue' group that had staged a 'coup' with the intent to sell WBAI and its signal to benefit other stations," according to the arbitrator. "A number of WBAI programmers, including WBAI Program Director Linda Perry, discussed the October 7 action on the air, repeating the claim that Vernile had been hired to sell WBAI and its signal and was part of a rogue group that had staged a coup. Other programmers called him a 'rat,' a 'crook' and other epitaphs [sic]."

The arbitrator concluded that Vernile had failed to prove that Pacifica terminated him because he was a whistleblower. Although Vernile made a prima facie case that his reporting of various violations of laws and regulations was a contributing factor in the termination of his employment, she said, Pacifica has proven by clear and convincing evidence that the board fired him primarily because it decided that he had exceeded his authority when he shut down WBAI’s local programming and discharged its staff without full board approval.

However, the arbitrator agreed with Vernile that he was defamed by false statements of fact made by WBAI programmers because there was not a shred of evidence, she said, that he had been hired to sell or to steal WBAI or its signal, or that his intention in shutting down local programming on Oct. 7 was to sell WBAI or its signal.
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