A jury finds that "outsourcing" actually meant "reprisal"

When Shirley Brady won a $1.2 million judgment against three Houston Independent School District supervisors and a consultant last week, HISD lawyers protested that the federal jury had based its decision on emotions, not facts.

Granted, said HISD lawyer Ivan Mlachak, Brady's supervisors did make her miserable in her job as a systems programmer for the district's mainframe computer by taking away her password to the system and assigning her trivial tasks for two years. But making someone miserable in her job is not necessarily illegal, Mlachak says. It was all part of an "outsourcing" process, in which HISD's mainframe operations were turned over to outside consultants to save money.

Brady had contended the district's motive was retaliation, not cost-cutting. The key consultant to whom HISD entrusted its vital computer operations was Ernie Carney. And in 1991, Brady informed an HISD internal auditor and the district attorney that Carney had loaned her boss in HISD's technology department, Alex Winkler, $2,500. She knew, because Carney opened his briefcase and showed her the loan papers when it seemed that Winkler might shift work to another consultant.

No indictments were returned, but a weeklong investigative series by Channel 13 revealed that Winkler's department had spent hundreds of thousands of dollars on unused equipment and software, and Winkler was accused of paying consultants for hours they hadn't worked. The school board forced Winkler to resign, and he died a few months later. For the next 15 months, Carney became, in his words, "a hot potato." After five years of working almost daily on HISD's mainframe computer, he wasn't welcome back.

With the technology department under the new management of Tom Cortese, the district could have put its problems behind it. The unused computer equipment was hooked up, and Brady, who had a spotless record in ten years of service, was pretty much on her own. That wasn't a problem for Brady, 58, a workaholic who seldom took lunch hours and frequently solved problems for the district on a quick turnaround.

Brady was also something of a softy. Carney had denied to Channel 13 that he had loaned money to Winkler and had bragged to reporter Wayne Dolcefino in Brady's presence that Brady was incompetent and that HISD's computer system wouldn't last a week without his expertise. Yet Brady had come to respect Carney's knowledge of the system, and when he called her periodically looking for a way to get back into HISD, she listened.

Carney's opportunity arose in January 1993. During the previous year, Brady worked alone in systems support, coping with a multitude of problems, and was recommended for promotion by two of her supervisors. And there was plenty of work to do on the district's mainframe. Brady, who was paid $39,000 a year, earned almost $22,000 in overtime in 1992. She single-handedly hooked up the district's new computer and planned to convert the system to new software during the two-week Christmas break. It did not go well.

An outside audit by Peat Marwick for the district was highly critical of the lack of management planning for the conversion. Why had the technology department entrusted to one person the complex hardware and software conversion of a computer that handled all of its receivables, payables, payroll and tax information? Why hadn't Brady been given more support? By early January, the defendants said, the system was crashing, and campus administrators were howling because they could not pay their vendors. Brady told her supervisors that the hardware wasn't adequate, and that they needed help. She suggested they bring in Ernie Carney.

Carney now worked for Operating Systems Inc., and the hiring of the firm was approved by the school board. The technology department also cleared his presence with the HISD auditor who handled the 1991 investigation, says Carney's attorney, A.J. Harper.

Carney told the department's managers that the only way he could guarantee the system's integrity was to have sole control. After a series of meetings, they agreed. By March, Brady's password to the system was abolished. For the next two years her tasks consisted chiefly of filing and shelving computer manuals that Carney sometimes left lying around, and working on a disaster response plan in case the computer went down. It was not nearly enough to keep her busy. She frequently asked her immediate supervisor, Brent Mahaffey, when she would get her password back, and was told to be patient. In July 1993, Cortese told her to start looking for a job, for her position was going be eliminated by September. That didn't happen, but Brady began to feel threatened. She filed two separate grievances with the district, and when those went nowhere, she filed her suit.

Lawyers for HISD claimed that Brady's treatment could not possibly be an act of retaliation because her department supervisor, Cortese, was not an HISD employee at the time Brady informed the auditor and the district attorney of the arrangement between Carney and Winkler. Decisions about Brady were based on getting the computer working, and at no time were Brady's allegations discussed, the defendants said. And besides, they argued, Brady was just mad because her overtime had gone away.

The members of the jury hardly saw it that way. HISD seemed to contradict itself about its motives for eliminating Brady's job. It couldn't say Brady was incompetent because it had given her good reviews for ten years and recommended her for promotions. Deputy superintendent Faye Bryant undermined the contention that the technology department was on a cost-saving crusade. She testified that her orders were to fix the computer, not to cut costs.

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