Turmoil at CoastHills CU as CEO fired, other executives depart

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Jeff York, until recently the longtime president and CEO of $1 billion CoastHills Credit Union, Lompoc, Calif., is alleging he was terminated “without cause” on March 16 in retaliation after York complained about a board member’s reported insistence that the CEO's 2018 bonus be tied to his losing weight.

In a statement emailed to Credit Union Journal, York further alleges the CU’s board of directors has “pushed” to have several other executives terminated because of their support for York, including Dave Upham, executive vice president and chief operations officer; Lisa Harlow, senior vice president of human resources; Rob Covarrubias, senior vice president business services; Scott Coe, senior vice president marketing; and executive assistant Linda Van Dyke. York said some of these people have been terminated, while others have resigned.

“Thus, the majority of the senior leadership has severed their relationship with the credit union in a mere two-week period,” York said.

“Board members Kate Griffith, Kris Andrews, Chuck Scheithauer and Bill Anders are operating outside of proper governance standards with their interference in the day-to-day operations of the credit union,” York said. “This interference has now contributed to the resignations of newly elected board member Linda Steger and longtime board member David Richardson.” he added.

Reached by telephone late Monday, York told Credit Union Journal he has kept silent for months about the situation, but decided to speak up after the current administration at CoastHills CU on March 23 told local media York had been “fired.”

York placed on ‘temporary leave’ March 6

On March 6, Credit Union Journal reported York had been placed on “temporary leave from the credit union,” following the release of a cryptic statement by CoastHills. In the statement, CoastHills said Dal Widick, a retired former CoastHills executive, had been installed as interim CEO. The situation was described in the statement as a “temporary leadership change” that “does not involve or impact CoastHills members or credit union operations in any way.”

The March 6 statement concluded by stating, “Because this issue involves confidential personnel matters, the credit union is not able to provide additional information at this time.”

According to York, last August during strategic planning sessions, one of CoastHills CU’s board members, Kate Griffith, introduced a proposal to the board that York’s annual bonus should be linked to a weight loss goal. In September, York filed a harassment complaint after, he said, there were “repeated attempts by Ms. Griffith to make the illegal weight loss proposition part of his 2018 goals.”

“It is hard to believe that any intelligent business person could think that such a proposal would be appropriate,” said York. “Can you imagine if I was a woman and she was a man?”

According to York, the board discussion of the weight-loss clause was preceded by a “reprimand” from the board to Griffith following “disparaging comments she made about York at a public event in Lompoc.”

York said when he filed the harassment complaint, he expected support from other board members.

“Instead, several board members – specifically Kris Andrews, Chuck Scheithauer and Bill Anders – became irate when I consulted with my personal attorney,” York told CU Journal. “I do not know why they became angry, or why they called it ‘lawyering up.’ I do not know what is in the minds of the board members because I have not been able to talk to them since January. Their attorney put them in lockdown.”

In his statement, York said the board created a hostile work environment and began a series of retaliatory actions including an investigation of an alleged anonymous complaint sent to federal and state regulators. The former CEO says he still has never seen the alleged complaint and does not know what it entails.

Outlining the timeline of events, York said in his statement that he was placed on paid administrative leave on Feb. 5 and his contract was terminated on March 16.

York noted during his 14 years as president and CEO, CoastHills grew from $350 million to $1.1 billion in assets, changed from a federal charter to a state charter, expanded its territory to include the five counties along California’s Central Coast, conducted a merger, expanded its branch network, launched a community foundation and business services program, and helped hundreds of members keep their homes during the recession.

“It is amazing that a healthy, vibrant credit union can be derailed by a few misguided volunteer board members, proposing illegal weight loss goals, creating a hostile work environment, and illegally retaliating,” said York. “It should never be about someone’s weight, body shape, skin color or religious beliefs. It should be about leadership, execution and results. CoastHills is a top-performing credit union with 68,000 members and 250 employees. The results should speak for themselves.”

Response from CoastHills CU

Late Monday, Dal Widick, interim president and CEO of CoastHills CU, responded to a request for a statement in response to York’s allegations. In his email, Widick said York “was terminated on March 16, 2018 as a result of a majority board vote.”

“The board decided it was in the best interest of the credit union, its members and staff to make an executive change,” Widick wrote. “The rationale behind his termination was not regarding his claims about a weight-loss issue. In order to protect Mr. York’s privacy, no further comment will be made regarding the reason or justification of the board’s actions. Mr. York’s comments regarding staff are not accurate. Two members of our board have resigned for personal reasons.

“Our credit union remains committed to making a difference in our neighbors’ lives on the Central Coast,” Widick added. “We crested a billion in assets at the end of 2016, and we anticipate exceeding a billion in loan balances soon – probably in 2018.”

‘Sad’ situation

During the Monday telephone interview with CU Journal, York described the situation as “sad.”

“I love CoastHills. I loved working there. The impact we have had in the community is tremendous,” he said.

York said his contract had rolled over 13 years in a row prior to the board’s recent decision not to renew it.

“I was terminated at will, or without cause. It was an interesting way to do it. We are in an at-will state, so I know that can happen, and I know board members can terminate CEOs for any reason they want, but I thought this was because of retaliation. That is where the rubber hits the road – it was retaliation.”

Asked if he planned to pursue legal action to resume his career at CoastHills, York replied: “I would love to have my job back, but I am not sure there is a path for that.”

“We will have to wait and see,” he said. “The culture the board has created is unreal. There are other people who have been terminated or have resigned. The CEO they put in place is someone who I asked to resign in 2015 because of some issues he had. He worked for me as an EVP and he did some things wrong. I gave him the choice of resigning or retiring and he retired the same day.”

York said the move by CoastHills CU’s current administration to tell local media York had been “fired” has damaged his future job prospects in the area.

“The Central Coast of California only has two credit unions – and CoastHills is one of them – so there really are no jobs out there. I am going to have to uproot my family to find something.

“The board has come to a strange place in this,” he continued. “These are unpaid volunteers and they are affecting daily operations of the credit union. I love what CoastHills used to stand for. At one time we were the best financial institution around and it is a shame that can change so quickly. If this can happen to me, should other people be worried?”

York has been active in credit union trade associations, including being past chairman of the California Credit Union League. He currently is a member of the board for the Credit Union National Association, representing District 6 through February 2020. York’s bio on the CUNA website notes he has been in the financial services industry for more than 30 years. Prior to being named president of CoastHills in July 2004, he was the CU’s executive vice president.

CoastHills Credit Union was founded in 1958 at Vandenberg Air Force Base in Lompoc. In October 2003 it adopted a community charter and changed its name from Vandenberg Federal Credit Union to CoastHills Federal Credit Union. It switched from a federal charter to a state charter in July 2014, and at that time its name was changed to CoastHills Credit Union.

Today, CoastHills serves five counties on the Central Coast of California, from Santa Cruz to Ventura. It has $1 billion in assets, 63,000 members, 12 branches and 240 employees.

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