The former president of the Sherman Economic Development Corp. was given a $91,162 consulting agreement earlier this year in exchange for his resignation amid allegations of misconduct, sexual harassment and creating a hostile work environment.


In late February, the SEDCO Board of Directors accepted the resignation and retirement of then-President John Plotnik, who officials at the time said was on vacation, but gave no comment on the reason for Plotnik’s departure.


The information on the consulting agreement and details of allegations against Plotnik were included in documents and emails obtained by the Herald Democrat through a Freedom of Information Act request. The request was filed in February, went before the Texas Attorney General in March and ultimately led to the release of the information in late May.


“An agreement was reached between both parties for an amicable separation and conclusion of the contract for employment,” Sherman Mayor David Plyler said in an email to the Sherman City Council on Feb. 13. “Mr. Plotnik’s retirement will be announced and the press release attached will be issued tomorrow. I am very proud of the way the SEDCO Board stepped in and handled the situation without having it become a front page matter.”


Calls to Plotnik seeking comment were not returned. A woman at Plotnik’s last known residence stated he had moved and she did not have a forwarding address.


Concerns raised


The documents that were released by the city show concerns about Plotnik’s work were first discussed in city emails on Jan. 10, but those emails also show the matter was raised with SEDCO board members months before that.


In an email to members of the SEDCO board dated Jan. 10, Sherman-based attorney Roger Sanders said the “hostile work environment” had been previously brought to the attention of board members Willie Steele and Greg Kirkpatrick. Steele left his position on the SEDCO board in September after he was appointed to the Sherman City Council.


In this email, Sanders said female employees “deserve a workplace free of demeaning comments, sexual innuendo and pressure to support misleading reports to the board and to the city council.”


The following week, on Jan. 17, SEDCO board President John Sild sent an email to members of the board and the council notifying them Plotnik had been placed on paid administrative lead amid an investigation into his conduct while at SEDCO.


“As of this morning, (SEDCO board member) Brad (Douglass) and I met with John Plotnik, along with representation from the city to discuss allegations within the SEDCO office,” Sild said in the email. “It was determined that the BoD (board of directors) and the city will launch a thorough investigation into these allegations. At this time, John Plotnik has been placed on paid administrative leave pending investigation. Frank Gadek will assume the lead in the office on an interim basis. Brad, (Sherman Director of Administration) Terrence Steele and myself will be monitoring the SEDCO office and assist in operations as needed.”


A call to Gadek for comment on behalf of SEDCO was not returned Friday. And calls to Douglass and Willie Steele were also not returned.


Plyler declined a request for an interview Friday stating that he was unable to discuss the topic due to the nature of the legal agreement.


“I am very thankful that our SEDCO Board of Directors works to ensure that the organization has a positive working environment for its employees,” Plyler said in a prepared statement. “Throughout SEDCO’s current changeover in leadership, the Board has represented the taxpayer’s interest well, and they have my full support as they search for a new president who can move the organization forward.”


Sild also did not return a call seeking comment, but emailed a prepared statement on the matter.


“This was a Human Resources issue that was handled and resolved,” Sild said in his statement. “Because of the legalities involved, I cannot comment any further, other than to say we are fully committed to supporting our employees. We look forward to filling the vacant president position with someone who shares our values and vision for Sherman’s future.”


Despite being placed on leave in mid-January, emails in late-February indicate Plotnik was still contacting SEDCO staff and giving directions regarding his insurance.


Investigation results


While results of the full investigation were not included in the initial information released, the preliminary results, which were included in an email from Sherman Human Resources Manager Cathy Perkins, outlined some of the concerns and issues that were brought up regarding Plotnik’s conduct while with SEDCO. These concerns range from a hostile work environment to the attempted removal of furniture and other items from the SEDCO office, which is connected to the office of the Sherman Chamber of Commerce.


“Staff appear to be stressed, tensed, timid and emotionally drained and prefer to avoid interactions with Mr. Plotnik as much as possible, therefore, having no real leadership they can turn to,” Perkins said in an undated email. “The staff state they are very careful what they say to Mr. Plotnik, as they are fearful of hostility.”


The email report also alleges that Plotnik removed a large amount of promotional items from the Chamber office. The report states these items were then used as gifts for Plotnik’s grandchildren.


Sherman Chamber President Eddie Brown said he was unaware of any items that had been taken from the Chamber. He added that the welcome packets handed out to visitors only include a city map and magazine, but promotional gifts from area businesses often are included in bags for new teachers and the Chamber’s annual fundraiser golf tournament.


The brief report concluded that morale under Plotnik’s tenure was poor, but staff remained dedicated to their work, the city and SEDCO, and wanted to continue with their jobs. The report said it was a “daily struggle” for individuals “to go to work each day, dreading Mr. Plotnik’s behavior.”


“Comments were made that Mr. Plotnik appears to be very qualified and a great public speaker,” Perkins said in an email. “However, his behavior is not seen by the public and he appears to have created an intolerable work environment.”


The preliminary investigation also stated Plotnik had poor interactions with some local industry leaders, including Kaiser Aluminum, who asked that Plotnik not return to the local plant without other staff from SEDCO. The document goes on to say Plotnik also placed inaccurate job information online against the wishes of area industries.


Melinda Ellsworth, vice president of investor relations and corporate communications for Kaiser Aluminum, said she was unaware of any issues regarding Plotnik and the Sherman facility.


Perkins’ email also stated Plotnik had written his personal memoirs during work hours and told SEDCO staff they were quite risqué.


Consulting agreement


With Plotnik’s resignation, he and the city signed an agreement in which Plotnik would continue to provide consulting services to SEDCO. In mid-February, Sherman City Attorney Brandon Shelby, who represents SEDCO, suggested an agreement that would include 58 percent of Plotnik’s base annual salary and an extension of his insurance through the end of 2018. Plotnik was also offered a portion of his vacation time. Calls to Shelby for comment were not immediately returned Friday.


“The board would not look favorably on explicit payment of attorney’s fees,” Shelby said in the Feb. 12 email to local attorney Clyde Siebman. “I would hope that the PTO (paid time off) would be sufficient for you and your client to come to an agreement.”


As part of the final agreement, SEDCO agreed to pay Plotnik $77,350 and extend his insurance through the end of 2018, while also honoring 200 hours of vacation time, valued at $13,812.50. The agreement also included a non-disclosure agreement, a release and waiver of rights, and a covenant not to sue the city. In exchange, Plotnik will continue to consult with SEDCO throughout the search for a new president and the transition period.


“Since John’s retirement, SEDCO has begun the process of seeking leadership that will continue the organization’s mission of bringing new, high-quality jobs to Sherman,” City Manager Robby Hefton, who declined an interview request Friday, said in a prepared statement. “The future of the city gets brighter every day, and I have every confidence SEDCO will find someone who can articulate that bright future to potential employers.”


Plotnik was hired by SEDCO in September 2015 following a monthslong search to replace previous SEDCO President Scott Connell, who announced his resignation in June 2015 to take the position of economic development director for the city of Irving. Plotnik had more than 40 years of industry experience, including a tenure with the Corpus Christi Regional Economic Development Corp.


During his time with SEDCO, Plotnik was involved in brokering deals and incentive packages with several industrial employers, including GlobiTech, Kaiser Aluminum, J.P. Hart Lumber and, most recently, electronic parts manufacturer Finisar Corp. In December, Finisar announced plans to start production of vertical-cavity surface-emitting lasers for Apple in the former MEMC building on Sherman’s south side by the third quarter of 2018. Plotnik was on stage for the Finisar announcement along with Plyler, then-Finisar Chief Executive Officer Jerry S. Rawls, Apple Chief Operating Officer Jeff Williams and others.


Previous agreements


Plotnik’s agreement with the city represents the third such agreement since 2015 in which former Sherman officials were offered a consulting opportunity in exchange for their resignation. In April 2015, former Sherman Fire Chief Jeff J. Jones was paid more than $71,000 after being relieved of duty.


“JJ offered nearly ten years of service to the City, and he brought about many needed changes during his tenure,” Hefton said previously in a statement. “When the time came for a change in leadership in that department, he and the City worked together in a reasonable and amicable way on a transition plan that was acceptable to everyone involved.”


That agreement was similar to one that was offered to former Sherman Police Chief Otis Henry in December 2016. Henry never signed the separation agreement and instead filed a lawsuit against Sherman in federal district court last year. Sherman settled that suit earlier this year and issued a joint statement with Henry.


“The Parties agreed that the litigation has resulted in unwanted harm to a longstanding relationship of mutual respect,” the statement reads. “While both Parties were confident in their legal positions, both Parties also agree that settling this matter without further litigation is in the best interest of all involved.”


Herald Democrat Managing Editor William C. Wadsack contributed to this article.