A Virginia credit union is being sued by two former executives who claim they were forced out after voicing concerns to regulators about its business practices.
In separate suits, Kathryn Salyer and Ben C. Garrett 3d are demanding lost compensation and $350,000 each in punitive damages from Langley Federal Credit Union in Hampton. They were dismissed in February, shortly after being confronted by Langley Federal's president over comments they made to a National Credit Union Administration examiner.
Two months earlier Mr. Garrett and Ms. Salyer told the examiner that Langley Federal's guidelines exposed it to internal theft.
Jean M. Yokum, president of $600 million-asset Langley Federal, and chairman Peter A. Morley were named as co-defendants in the suits, which were filed in District Court last week. A spokeswoman for Ms. Yokum said that the credit union was "not at liberty" to discuss litigation.
Mr. Garrett, who had been vice president of operations for 10 years, and Ms. Salyer, who was promoted to vice president of marketing in March 1998, both referred questions to their attorneys.
"We feel the credit union's actions not only monumentally stupid but petty and mean-spirited as well," said William V. Hoyle Jr., a Newport News, Va., attorney representing Mr. Garrett. "Firing senior executives for disloyalty after they answer a federal examiner's questions just amazes me."
In their suits, the plaintiffs claim they were approached by an examiner last November, during a routine inspection. In separate interviews, each mentioned an employee with financial problems "who had unlimited access to customer accounts." Also, no one at the credit union had access to that employee's account, a condition that led the plaintiffs "to be concerned about security issues."
Ms. Salyer also expressed concern that Langley Federal's year-2000 testing was lagging and might not be completed by the NCUA's June 30 deadline. Both say they were told by the examiner that their comments would be kept confidential.
On Feb. 1, however, the two plaintiffs and one other vice president were summoned to Ms. Yokum's office. According to the complaint, Mr. Morley told them that the examiner had "identified two vice presidents who had discussed issues that Mr. Morley believed should not have been discussed with the examiner."
Mr. Garrett and Ms. Salyer acknowledged that they had spoken to the examiner.
Three days later, according to Mr. Garrett, Ms. Yokum called him into a conference room and presented him with three prepared letters. One announced his resignation, one his discharge, and one his retirement. He chose to retire.
Ms. Salyer said that when she refused to resign, she was fired by Ms. Yokum.
The plaintiffs are following guidelines established in the whistle- blowing provision of the Federal Credit Union Act. The clause, known as the Credit Union Employee Protection Remedy, shields employees who give examiners information on possible violations or safety breaches from retaliation from their employer.
The act instructs employees who feel they have been wrongfully terminated to file a civil suit.
"Congress thought it was so important for people to feel comfortable reporting violations that they put it in the law," said Erika L. Winter, Ms. Salyer's Williamsburg, Va.-based attorney. "If Congress thinks it is an important duty, so should Langley Federal Credit Union." The trials are slated to begin this year.
