The Whalley Trial Part II: Jerry Ryan Takes the Stand

Editor’s Note: John Whalley, the former Economic Development Manager of the Cape Breton Regional Municipality (CBRM) is suing the CBRM for constructive dismissal. The case finally came to trial from 20-24 August 2018 and the Spectator was there. We’re presenting our coverage in a series of articles because the trial touched on so many issues of interest to CBRM residents. This is Part II. (Read Part I)

 

The trial begins with the plaintiff presenting evidence against the defendant. The plaintiff may call witnesses to testify to facts and present evidence: papers, photographs or other documents. The defendant may cross-examine the plaintiff’s witnesses to test their evidence. — How do civil cases work? Department of Justice Canada

As the plaintiff, Whalley (or more precisely, his lawyer) called the first witness: Jerimiah (Jerry) Ryan, the former CAO of the CBRM.

CBRM Mayor Cecil Clarke (left) and former CAO Jerry Ryan (rght).

CBRM Mayor Cecil Clarke (left) and former CAO Jerry Ryan (rght).

Ryan, who was also the former CAO of the Town of New Waterford and the Municipality of the County of Cape Breton, was appointed as the first CAO of the  amalgamated Cape Breton Regional Municipality on 1 September 1994 by Charles Campbell, the engineer and consultant who served as “coordinator” of the amalgamation project and who was, in effect, a “council of one” at that stage of the municipality’s development. 1

Ryan told the court that when he applied for the CAO job, in addition to his regular CV he’d submitted a supplementary document stating his belief that amalgamation offered the CBRM a “once in a lifetime” opportunity to tackle its economic decline.

Ryan noted that at that time, a group of concerned citizens had recently published Urgent Agenda, a document outlining the economic challenges facing the Island. Ryan said his position was that the document was there and the new government “would have to deal with it.” To his way of thinking, economic development would be “the most important role this new government has to play.” Asked by Mitchell if this was a “new” or “different” role for the municipal government, Ryan replied, “Very different.”

 

Urgent Agenda

I was curious about Urgent Agenda and in searching for further information stumbled upon this reference from a book called The Loom of Change: Weaving a New Economy on Cape Breton 2

Between 1990 and 1994, a highly organized and intensive attempt to develop a strategic economic development plan was carried out in that area of Cape Breton which now falls within the Cape Breton Regional Municipality. The goals of this initiative, called Urgent Agenda, were to address the community’s need for an appropriate structure and an open effective process for economic planning and to come to agreement on new economic directions for the community.

Urgent Agenda was — wait for it —  “an initiative of New Dawn Enterprises.”

I suggested in Part I that Mayor Cecil Clarke was a presence during the Whalley trial, even though he wasn’t actually present, and the same can be said of New Dawn: Whalley now works for the organization; its president, Rankin MacSween, ran against Cecil Clarke for mayor not once but twice (as Mozvik reminded the court at least twice in my hearing); and (as I now realize) Ryan was referring to it when he cited the Urgent Agenda initiative as an inspiration.

But there was another familiar presence hidden in this “Urgent Agenda” reference. The Loom of Change  (which was published by the Cape Breton University press in 2003) continues:

[A]fter four years of renewed and dedicated effort, with the reports of all of the sectoral planning groups in hand, the initiative once again came up against the need for operating funds to move to the next stage. Already under pressure to accept political appointees in exchange for federal support, Urgent Agenda’s management committee was notified by the county warden that the whole initiative would no longer be under its control. The members of the management committee were asked to resign and a new politically active chairperson was appointed by the warden. The Urgent Agenda initiative was then reconstituted as the Cape Breton County Economic Development Authority [CBCEDA], ostensibly accountable to the council of the newly amalgamated municipality but in fact answerable to neither the municipal council nor the community.

I consulted the minutes from the 14 June 1995 CBRM “Council/Staff Orientation” meeting and sure enough, there was a delegation from CBCEDA — including its board chair, CBRM Councilor Ray Kavanaugh, and its executive director, Eileen Lannon Oldford — presenting to council.

As you will probably recall, Cape Breton County Economic Development Authority (CBCEDA) employed Clarke for a year after he’d left provincial politics to run, unsuccessfully, in the federal riding of Sydney-Victoria. CBCEDA lost its federal funding in 2013 and morphed into Business Cape Breton (BCB), which continued to be led by Lannon Oldford.

Clarke left CBCEDA to run for mayor and once in office, declared the organization (now BCB) CBRM’s “economic development arm” and (as we’ll see when we get to Whalley’s own testimony) concerned himself personally with ensuring the organization had funding, but right up until its recent demise, one could fairly have said of BCB that it was “ostensibly accountable to the council of the…amalgamated municipality but in fact answerable to neither the municipal council nor the community.”

There really is something to be said for knowing your history, isn’t there?

 

‘A fella…you should see’

As mentioned, Ryan was hired in September of 1994. The CBRM was “stood up” as an amalgamated municipality on 1 August 1995 (meaning it officially began operations, not that it was left at the altar, although I believe a shotgun may have been involved in getting the Town of Louisbourg there).

John Whalley

John Whalley

In the months between his appointment as CAO and the official start of the amalgamated government, Ryan and Charles Campbell:

…recruited the remaining senior officials to begin the implementation process. The incorporation legislation was written to provide the opportunity for qualified officials from the eight municipal units to receive preferential consideration over candidates from outside those units.3

Not long after the launch of the CBRM, in March 1996, the municipality created the role of economic development officer. The successful candidate (not named during the trial but listed in the minutes of this 13 August 1996 Committee of the Whole Council meeting as Adrian White) left the position after three months.

The CBRM had to start its search all over again.

Whalley, who was working for the federal government in Halifax at the time as an economic analyst, had not applied for the job the first time out but did during this second round of hiring. Ryan testified that having received Whalley’s CV, Jim MacCormack, director of corporate services (a position that no longer exists in the CBRM) came to him and said, “I think we’ve got a fella here that I think you should see…I think he has the vision that we’re looking for.”

Under questioning from Mitchell, Ryan said that Whalley, who had a masters degree in economics and had finished the bulk of the work necessary for his PhD, was “more than qualified” for the job and had “different ideas” about economic development. Specifically, Whalley was critical of the “project-based” approach taken by CBCEDA. He felt (and here I’m drawing on Whalley’s own testimony on the subject) that the organization, which was following something called “The Strategic Action Plan,” written by Keith Brown, Dean of the Community Extension Department at what was then the University College of Cape Breton), was dealing with hundreds of project recommendations which Whalley felt would not improve the region’s position, given the “scale and scope” of its problems.

Blair Mitchell (Source: Twitter)

Blair Mitchell (Source: Twitter)

Both Whalley and Ryan recalled a conversation about this plan, in which Ryan asked Whalley if it wasn’t better to have a bad plan than no plan at all — a proposition Whalley strongly disagreed with, telling Ryan that a bad plan would take you in a bad direction.  Whalley’s view was that the municipality’s $250,000 economic development fund was basically “irrelevant” in the face of the CBRM’s problems and that administering it could occupy all one’s time “to no purpose.”

Ryan said Whalley argued what was needed was to “take a measurement of your problems” (or as Whalley himself would later say, undertake a “comprehensive economic analysis”) and then draft a strategy to tackle them. Ryan told the court that a focus on “ribbon-cuttings” can “give the impression progress is happening when it’s not” and that gaining 500 jobs is “not so great” if you lose 700.

Ryan said Whalley’s conversation was “way beyond” him, even though he’d earlier sought advice from Donald Savoie as to the “appropriate role” for government in economic development. (Savoie told him the CBRM economy was “like a 747 going for a nose dive.”)

 

Severance

In short, Ryan was very impressed by Whalley and Whalley got the job.  The offer of employment was in a letter from Ryan to Whalley dated March 1997. The position itself had been renamed from economic development officer to economic development manager, as you can see in the minutes from the 15 April 1997 council meeting during which Whalley was introduced.

In terms of the charge of constructive dismissal, Ryan’s testimony was important because he told the court that although the letter of hire did not mention severance, he had promised Whalley, a non-unionized employee, severance in the case of dismissal without cause, the same severance clause he himself had — 12 months’ salary plus one month for every year worked up to a limit of 18.

Ryan explained that his own severance package was necessary because of the degree of “uncertainty” surrounding his position. His annual review was to be carried out by council and his severance clause, he said, protected him in case council decided it was “better off with someone else.” Ryan said he extended the same severance protection to other senior employees, including Whalley, and Whalley would later testify that he always felt he had this 18-month severance clause in his contract.

But while Whalley testified that he remembered signing the contract at the same time he signed the letter of hire and a number of other documents, including those related to health insurance and pension, he could not find a copy of the contract, nor could the CBRM (although the CBRM’s search for documents turned out to have been a little slipshod…but I’m getting ahead of myself).

Mozvik argued this was because no such contract existed, that the letter of hire constituted Whalley’s agreement with the municipality and that it did not mention severance. Mitchell argued it existed but that even if it didn’t, there were legal precedents (he cited some, I am not going to get into them) for accepting “oral representations” as part of a contract.

Mitchell further argued that just because the letter of hire was silent on the subject of severance didn’t mean no severance had been offered — he pointed out that the letter was also silent on the subject of travel allowances and professional development, both of which Whalley was entitled to as a senior municipal employee.

 

Jobs, jobs, jobs

When it came to the question of Whalley’s responsibilities as economic development manager, Mozvik seemed to want the court to stick to the job description contained in the 1997 letter of hire while Mitchell seemed to prefer Whalley’s own description of his responsibilities as outlined in an email to incoming CAO Michael Merritt in 2014.

Ryan told the court that while Whalley’s job description didn’t change “on paper” it did change “in practice.”

(Personal observation: has anyone ever done a job for 18 years, as Whalley did, without any change in responsibilities?)

I will discuss Whalley’s job description more fully when I get to his testimony. Right now, though, I’d just like to say a word about the role of the economic development manager in creating jobs.

Mozvik put it to Ryan that “at the end of the day” economic development was about “jobs.” (Later in the trial his remarks became even more pointed: he said something to the effect that Whalley was very good at “not creating jobs.”)

Tony Mozvik (Source: ContactOut)

Tony Mozvik (Source: ContactOut)

Ryan said, “I disagree.” Whalley, he said, didn’t create any jobs because, “That wasn’t his job.”

Mozvik helpfully suggested to the press gallery during a subsequent break that “Economic development manager didn’t have to create a job” should be our headline for that day’s coverage.

While I always appreciate help with headlines (they’re difficult), I think that one would make it look like I have a very strange notion of what economists do. I’d have to follow it up with an attack on Paul Krugman or Joseph Stieglitz or Thomas Piketty for their shocking failure to create jobs.

Anyone who reads the Spectator will know how little faith I have in economic development as practiced in these parts for the past 50 years or so, but even I can see the value in trying to do a comprehensive analysis of your economic situation and then drafting a strategy to deal with it based on the results.

And even I can see that the person you task with analyzing the situation and drafting that strategy will not so much be creating jobs as trying to foster conditions that will allow others to create jobs.

But having said that, it’s also worth noting that the deal Mozvik later held up as a fine example of economic development and job creation — the McKeil imbroglio — happened in the name of port development. And port development was, by his own account (and that of the man who hired him, and that of the current CAO of the CBRM) one of Whalley’s chief responsibilities. So you could actually credit him with any jobs created in the port. (Did I mention I used to want to be a lawyer?)

But I’m getting ahead of myself (again), the McKeil deal comes later and right now, I am itching to get to the most interesting part of Ryan’s testimony.

 

Ryan’s exit

Ryan served as CAO under the CBRM’s first mayor, John Coady; its second mayor, David Muise; and its third mayor, John Morgan, who won three successive terms but chose not to run again in 2012.

Five people ran for CBRM mayor in 2012 and the final results looked like this:

CandidateVotesResults
Elizabeth Barrie
775
Cecil Clarke
27,609
Elected
Wilf Isaac264
Rankin MacSween

17,787
Glenn Jessome660

Ryan testified that within “days” of being sworn in as mayor in November 2012, Clarke came to Ryan’s office and said that it would be “difficult” for the “new administration” to work with Whalley and Ryan, as the two were closely tied to former Mayor Morgan’s (ultimately unsuccessful) equalization lawsuit against the province.

Asked by Mitchell who was on the “other side” of that court case, Ryan said, “Minister Clarke.” Asked if that was the “same gentleman who had just become mayor of the CBRM, Ryan said, “Yes.”

(We’ll talk more about equalization when we come to Whalley’s testimony.)

Mozvik, I should mention, tried to get the court to dismiss this account of the conversation between Clarke and Ryan as “hearsay” and therefore inadmissable as evidence, but Mitchell argued the statement should be admitted not for its truth, but for the context it provided. Justice Murray ruled Mitchell could question Ryan about the conversation provided he stuck to Ryan’s “personal knowledge” of what was said about Whalley.

According to Ryan, what Clarke said was that, in the wake of the equalization case, it could be difficult for Ryan and Whalley (who, Ryan admitted, had taken the lead on the issue) to deal with the province.

And here, I must bow to Clarke’s greater expertise in municipal/provincial relations; expertise that has been much on display these past few months, in carefully crafted olive branches like this one:

But I digress…

Ryan reported this conversation to Whalley, telling him it seemed “almost certain” Ryan himself would be leaving the municipality and warning Whalley that his own appointment might be terminated “at some point.”

And then this happened:

 

You can read the full account of the meeting below:

Special Council December 20, 2012

 

I wondered how Ryan’s sudden decision to leave the CAO’s post was explained to the public and found only this Cape Breton Post article which offered no explanation other than that Ryan was “easing into retirement.”

Ryan wasn’t  permitted to get into detail about how he himself came to leave the CBRM during the trial. Tony Mozvik was adamant there was no need to get into the details of Ryan’s departure and Justice Murray agreed with him, but Mozvik did make one revealing reference at the very end of the trial, during a discussion about potential damages.

There had been some question about whether Ryan’s contract promised him a “lump sum” severance. Mozvik referred to this saying, the “evidence clearly suggests Mr. Ryan was let go.” Mozvik’s point was that Ryan was paid severance over time, but I sat up straight because  that was the first time Ryan’s fate had been stated so baldly.

I guess being let go is one way of easing into retirement…

 

Staying on

Whalley, however, did not leave the CBRM when Ryan did.

Ryan testified that shortly after warning Whalley he might be terminated, he returned to him with word that he might be able to stay on after all. Ryan said he’d made a “plea” to the mayor to allow the economic development manager to remain and continue to oversee the Port of Sydney development file, which he said had been becoming increasingly important in and of itself and an increasingly important part of Whalley’s job.

In the end, Whalley agreed to stay on and the mayor (apparently) agreed to let him (although the mayor, as we established in Part I, officially has no role in the hiring or firing CBRM staff).

And that’s where we’ll adjourn.

We’ll pick up in Part III with Whalley’s own testimony.

Note: This article has been updated to clarify that Cecil Clarke worked for BCB when it was still called CBCEDA.

 

 

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