Stillwater school district approves $475K settlement with former finance director

Mary Divine, Pioneer Press
·7 min read

The Stillwater Area School District has reached a $475,000 settlement with its former director of finance and operations, Kristen Hoheisel, who sued the school district in 2020 and was later fired.

The settlement agreement includes a public statement of support for Hoheisel by the school board and blames “ongoing political turmoil” with the then-elected school board for her termination. It also includes a letter of recommendation written on her behalf.

“Ms. Hoheisel served at the pleasure of the school board as an at-will employee, and her discharge was based on her relationship with the school board members at that time,” according to the statement read by board chairwoman Alison Sherman during a special board meeting on Monday night. “The current school board believes that Ms. Hoheisel was performing her job duties adequately in the midst of a difficult political environment for employees and does not support the employment actions taken by that board.”

The board’s public statement of support, Hoheisel said, was key to her decision to accept the settlement.

“I believe that the district without legally admitting fault admitted that they were wrong, and that was my position from the beginning,” Hoheisel said Tuesday. “That the way I was treated, through all the various mediums – social media, the news, the papers, the character attacks — the only way to remedy those untruths in my mind was that statement.

“To have acknowledgment – whether it be from the board or a jury – was my focus,” she said. “I would have gone to the mat with this.”

Following a closed session of the board on Monday night, school district attorney Trevor Helmers said the settlement was reached after both sides participated in mandatory mediation last fall.

“While the district did nothing illegal in this case and has very strong defenses to the claims and could move forward with seeking summary judgment, (the school district’s) insurance company is recommending settlement based on the terms outlined in the settlement agreement and release of claims that is being presented to you for approval tonight,” Helmers told the board on Monday night.

The district’s insurance provider could settle the claim without the school board’s authority, “but they are asking for you to approve and sign this agreement,” Helmers said. “All of the money in the settlement will be coming from your insurer, and the district will not have to pay a dime towards the settlement beyond the retainer that you’ve already paid. In addition, you get the benefit of having this case being fully and finally concluded and removing the significant strain on your administration and the community of having this case proceed to motions and trial over the coming months.”

Complaints, then lawsuit

Hoheisel sued the school district and then-school board Chairwoman Sarah Stivland in May 2020 for allegedly violating the state’s open-meeting laws, the whistleblower statute and the data practices act.

In 2017, Hoheisel, who had worked for the district since 2015, filed a hostile-work-environment complaint alleging gender discrimination and harassment on the part of Stivland and another board member. Her complaint was investigated by an independent, third-party investigator appointed by the school board who found her complaint had merit, but “there was no action taken by the school board to punish the wrongdoing found in the investigative report (and) the harassment continued,” the lawsuit stated.

According to the lawsuit, Hoheisel filed another complaint in February 2020 in which she documented conversations she had had with Superintendent Denise Pontrelli about her hostile work environment and had asked that measures be taken to stop it. Less than a month later, the school board voted to place Hoheisel on administrative leave.

“Stivland was aware of and had seen Hoheisel’s … complaint before the March 19, 2020 school board meeting,” the lawsuit states.

The lawsuit alleges the school district and Stivland violated the state’s whistleblower statute when they “penalized, threatened and disciplined (her) because she had, in good faith, reported violations or suspected violations of federal, state, common law or rules adopted pursuant to law to her employer.”

The school district and Stivland also violated the state’s data practices act by being “woefully careless, haphazard, and, at times, entirely intentional with identifying Hoheisel as Employee A in the ongoing school board investigations,” the lawsuit states.

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The consent agenda for the open portion of the April 9, 2020, school board meeting included an item about “Hiring of Interim Executive Director of Finance & Operations,” and the lawsuit says, “There is no reason to do that unless your current Executive Director is absent or on leave.”

KSTP-TV showed Hoheisel’s photo and name on screen during an April, 9, 2020, news segment reporting that the Stillwater school board “voted to place a top administrator on paid leave in March, but didn’t publicly disclose who the employee was, citing private personnel laws,” the lawsuit states, quoting from the report. “However, multiple sources told 5 EYEWITNESS NEWS that Hoheisel, the district’s top financier, is the employee on paid leave.”

According to the lawsuit, the “‘multiple sources’ … can only have been members of the school board, or persons who learned about Hoheisel’s identity through members of the school board.”

Stivland and fellow incumbent board member Mike Ptacek lost their bids for reelection in November 2020.

Damages, lost wages

Terms of the settlement also included a letter of recommendation for Hoheisel signed by Superintendent Michael Funk.

“While I did not have the pleasure of working with Ms. Hoheisel during her time with the district, I understand from several district employees, board members and community members that Ms. Hoheisel consistently demonstrated proficiency in performing her job duties and met the district’s expectations,” according to the letter written by Funk, whose first day on the job was July 1. “Moreover … I understand that Ms. Hoheisel is highly respected in the fields of school district administration and finance. She is recognized as a highly skilled and competent leader.”

Hoheisel’s $475,000 settlement is to be paid out in three parts: a $142,100 check for the reimbursement of attorneys’ fees and expenses incurred in prosecuting the lawsuit; a check for $299,610 for non-wage loss damages, and a $33,290 check for compensation for lost wages, according to the 11-page settlement agreement.

“This has never been about money. Ever,” Hoheisel said Tuesday. “It was about the physical damage, and the damage to my family — my kids, my husband — and the damage to me professionally. It was nothing more than a political vendetta and discrimination against female workers.”

Hoheisel, who now works as an educational consultant, said she has had to deal with health issues since filing her first complaint with the district. “I know these chronic physical conditions were created due to my working environment,” she said.

Funk said Monday night that the settlement will “allow all parties to move forward.”

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“I would like to thank Sarah Stivland and her colleagues on the previous board for their service to our district,” he said. “I would also like to thank Kristin Hoheisel and wish her well. This chapter is now closed. With new leadership at the school board and administrative levels, we are focusing our efforts on providing the best learning environment possible for our students.”

Hoheisel said Tuesday that she, too, is happy that the district can now move forward.

“I think that they are on a good trajectory now,” said Hoheisel, who lives in Lake Elmo. “I am happy that I can start the next chapter. I am disappointed that I didn’t do more to change some discrimination patterns, but, that said, at least for me, the lead instigators are gone. There has been a lot of damage professionally and personally that can’t be undone, but, hopefully, my family and I will have the ability to move forward.”

Stivland did not return a phone call seeking comment.