Laguna Art Museum faces a whistleblower complaint from a former senior staffer claiming she endured retaliation after informing board members about violations of state employment law, court records show.
Bernadette Clemens, a former LAM director of advancement, filed an Oct. 12 complaint in Orange County Superior Court alleging the nonprofit missed payrolls, failed to mail tax documents to employees, didn’t file its 2020 tax returns, and cut staffers’ pay by 5% even though it received two federal Paycheck Protection Program loans.
The Museum secured a $260,500 loan in April 2020 to retain 31 jobs at risk during COVID-19— this sum has been paid in full or forgiven. In January 2021, the Museum secured a $260,540 loan that’s still outstanding, according to federal records.
Clemens was tasked by the Museum Board chair Joe Hanauer and finance committee in December 2020 with additional responsibilities which included acting as a banking and Human Resources benefits contract signer, the complaint states. This was around the same time former executive director Malcolm Warner retired from the Museum.
“[P]laintiff found that many legal requirements were not being met by LAM,” Clemens’ attorney Douglas Hoang wrote in the complaint. “Moreover, LAM employees expressed numerous concerns and complaint directly to Plaintiff regarding various issues including legal violations by LAM.”
As early as February, Clemens internally voiced concerns about employment law violations to Museum board chairman Joe Hanauer, board vice chairwoman Kristin Samuelian, and a human resources consultant, according to the complaint. Clemens alleges she was wrongfully terminated on or about May 14. This was just 11 days after Laguna Art Museum executive director Julie Perlin Lee took the institution’s helm.
“Laguna Art Museum prides itself on serving the community through educational programs, environmental awareness through art, exhibits and events, and has been advised to not comment on a pending legal matter,” Hanauer said in a prepared statement.
Laguna Art Museum prides itself on serving the community through educational programs, environmental awareness through art, exhibits and events, and has been advised to not comment on a pending legal matter.
As a result of her termination, Clemens claims she sought mental health care that she has and will personally incur expenses for. Additionally, LAM didn’t provide Clemens with her pay and wage records within the 21 days required by the state law after her request in June 2021, according to the complaint.
Laguna Art Museum’s attorneys denied the allegations in Clemens’ complaint and argued multiple defenses in an answer filed Nov. 17.
“Plaintiff did not exercise ordinary care on her own behalf, and her own acts and omissions proximately caused and/or contributed to the loss, injury, damage, or detriment alleged by Plaintiff…” LAM attorney Andrew Wellman wrote in the filing.
Like many museums nationwide, Laguna Art Museum faced a crisis following COVID-19 health restrictions on public indoor activities. After a hard closure during a winter case surge, Orange County museums were allowed to reopen indoors at 50% capacity with some modifications in March.
But unlike some public-facing nonprofits, LAM has an ongoing revenue stream provided by local hoteliers.
For Fiscal Year 2021-22, Laguna Art Museum received $147,000 from a 2% assessment on overnight Laguna Beach hotel and motel guests, according to an annual report. Following a strong summer and fall for the hospitality industry, the Museum is projected to receive $218,000. The nonprofit’s total expenses were about $2.2 million in 2019, according to the nonprofit’s latest available tax return on guidestar.org.
Attorneys for the parties didn’t respond to a request for comment on Tuesday.
Clemens is asking for unspecified damages, civil penalties, and attorneys’ fees, according to the complaint. A case management conference is scheduled before Superior Court Judge Lon Hurwitz on March 14.
