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A woman has filed a federal lawsuit against the city of Valparaiso, its mayor, a former city administrator, Organizational Development Solutions Inc. and the company’s president, alleging gender and pay discrimination, harassment, retaliation and defamation.
Kathy Gralik has been an employee of the city of Valparaiso since 2000 and has been the city’s human resources director since 2013.
In March 2022, Gralik served the city and Mayor Matt Murphy with a notice of a tort claim in compliance with the Indiana Tort Claims Act.
Gralik’s lawsuit, Kathy Lynn Gralik v. City of Valparaiso, Mayor Matt Murphy (in his individual capacity), and Mike Jessen (in his individual capacity), Organizational Development Solutions Inc., and Desila Rosetti, 2:23-cv-00279, was then filed Tuesday in the U.S. District Court for the Northern District of Indiana.
In the lawsuit, Gralik alleges pay disparities between the female department heads and the male department heads.
According to the lawsuit, before June 2023, there were four female department heads and 10 male department heads employed by the city.
In 2022, the city did a wage study and found, on average, the female department heads were paid 31% less than their male counterparts.
The study classified Gralik’s position as “Executive B” and found that she had the lowest annual salary in that classification.
A male information technology director in the same classification had an annual salary of $88,198, whereas Gralik’s salary was $73,895.
The city gave pay raises capped at 4%, or halfway to the midpoint in the study, and the city council set the pay range for the city’s employees.
Murphy and City Administrator Mike Jessen chose what department heads would be paid, which was supposed to fall in the range set by the city council and the wage study recommendations. However, according to Gralik’s complaint, Murphy and Jessen insisted on setting salaries outside the wage study and what was passed by the council.
Gralik informed Jessen that they needed to apply the wage study findings to remove any gender-based pay disparities among the city employees.
The complaint claims that when Gralik met with Jessen in his office to express her concerns, he didn’t even look away from his computer and dismissed her concerns. She later found out that the plan to pay men over the midpoint a $500 pay raise was increased to a $1,000 pay raise.
When discussing the pay gap disparity in the city with Clerk-Treasurer Holly Taylor, Gralik was told, “Those guys never listen to me.”
With the 4% cap, the female department heads remained $8,335.50 below the midpoint of the salary range on average, while male department heads moved to $1,529.50 above the midpoint on average.
Even with Gralik’s salary increase, she was still the lowest paid Executive B employee for the city.
In March 2022, Gralik told Jessen that she needed hip replacement surgery, which was scheduled for April 29, 2022.
According to the complaint, the surgery potentially qualified her for Family and Medical Leave Act leave, but the city never informed her of that. Instead, the city left it to Gralik as head of human resources to provide that notice to herself.
After her surgery, she resumed working part time a week later from home and then eventually returned to her office because the city didn’t provide anyone to cover her duties.
The complaint claims on several occasions, Gralik informed Murphy, Jessen and the city that the HR department needed to be centralized and have additional staff, but her advice was disregarded.
Two months after her surgery, the city hired Organizational Development Solutions Inc. to conduct an audit of the HR department.
According to the complaint, the audit was initially suggested by Steve Poulos, a fellow male department head with no direct supervisory authority over Gralik.
Desila Rosetti is the president and founder of ODA and the cousin of Murphy.
Gralik was not informed of the audit. She claims no male department head had their department audited while being excluded from the decision to conduct the audit.
“On information and belief, the audit was undertaken to harm Gralik’s reputation and was pretextual, not undertaken for any legitimate purpose, but in retaliation for Gralik taking FMLA leave, because of her gender and opposition to the City’s discriminatory policies, and/or because Gralik helped other City employees by handling their gender-related complaints,” the complaint alleges.
ODS and Rosetti held the kickoff meeting for the audit while Gralik was on vacation.
An executive summary of ODS and Rosetti’s audit and an attendant audit report was issued in October 2022. Gralik was finally provided the executive summary in January 2023 after multiple requests to Jessen, according to the complaint. Gralik wasn’t provided the audit report until after she hired legal representation, who requested it from the city’s counsel.
In the complaint, Gralik claims that the audit report and executive summary contain false statements about herself and the department.
The complaint also states an employee in the fire department informed Gralik that ODS and Rosetti directed her to destroy certain city files during the audit process.
After the executive summary, Jessen told Gralik that they were planning to hire a chief human resources officer and that she was welcome to apply for the position.
Someone else was hired for the position and Gralik was removed from her department head position and the city’s leadership team.
The city told Gralik she would be welcomed to apply for a chief human resources officer deputy position that hasn’t been created yet, but that her current position would be eliminated no later than Dec. 31, 2023.
Gralik is being represented by Kathleen DeLaney nd Christopher Stake with DeLaney & DeLaney of Indianapolis and Paul Poracky and Karrie Schwartz of Koransky, Bouwer & Poracky.
“Ms. Gralik is a dedicated public servant to the City of Valparaiso and doesn’t deserve the treatment she has experienced. We look forward to presenting her case in court,” DeLaney said in a news release.
The complaint is alleging violations of the Equal Pay Act, FMLA interference/retaliation, equal protection claims against all city defendants, violations of Gralik’s First Amendment rights and defamation.
“Despite devoting her working life to the City of Valparaiso, Lynn Gralik has been subject to terribly unfair pay and conditions. She has bravely stepped up to remedy this situation, not just for herself, but for others employed by the City,” co-counsel Schwartz said in a news release.
The complaint is seeking compensatory damages, emotional distress damages, reputational damages, liquidated and/or punitive damages, and attorney fees and costs in unspecified amounts in the lawsuit and a jury trial.
“After nearly 23 years of service to a city and its employees that I love, I was targeted for doing my job well by assisting women with complaints against members of the Murphy Administration,” Gralik said in a news release.
Indiana Lawyer reached out to Murphy and Jessen for comment.
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