Fighting for Justice Against AC Transit

The story of the legal battle waged by the husband of a former general manager who died on the job.

Paul Banks just wants justice for his wife. Sharon Banks died nearly nine years ago, after suffering two major strokes while serving as the general manager of AC Transit. By all accounts, she was a respected, first-rate executive, and during her tenure at the helm of the East Bay transit agency, it enjoyed boom times. Yet after she suffered the strokes, he believes the agency’s top brass mistreated her. They wouldn’t give her retirement benefits and paid her successor more than her.

Ever since his wife’s death in 1999, Paul Banks has fought the agency in an attempt to right those wrongs. In 2001, he sued AC Transit in federal court for racial and gender discrimination. Sharon Banks was the first African-American woman to run a major transit agency in California. Over the years, agency officials have maintained that they treated Sharon Banks fairly, but then last year, Paul Banks won an arbitration award for his wife’s estate, stemming from the 2001 lawsuit. However, as of last Friday, the agency had still had not paid what it owed. “They’ve tried to break me,” he told Full Disclosure. “They’ve tried to marginalize her.”

The story of Sharon Banks and AC Transit began eighteen years ago. A lawyer in private practice, she joined the transit agency in 1990 as its general counsel. The following year the AC Transit board promoted her to general manager, the agency’s top executive position. At the time, the agency was in serious financial trouble after churning through several general managers. But with Banks in charge it found stability and blossomed. Last year, federal arbitrator Andria Knapp summed up Banks’ career in her ruling: “There is no dispute that Ms. Banks performed her job duties satisfactorily at all times prior to her final illness and she was highly regarded at all levels of district operations, including the board of directors.”

But in January 1999, Banks suffered a stroke while flying home from a business trip with one of her deputies, Rick Fernandez. She was just 53, and Paul Banks said she was under great strain at the time because she regularly put in long hours at the office. After the stroke, he said, she intended to come back to work within a few months and wanted another of her deputies, Betty Blubaugh, to take over for her while she was recovering. But instead, the agency’s board of directors chose Fernandez.

Then in April 1999, Banks suffered another major stroke. But she wasn’t about to give up, and hoped that she would someday return to work. However, she soon faced a problem. The AC Transit board could have put her on paid administrative leave while she was undergoing physical therapy, but instead it told her to use her sick leave. Other agency employees then came to the rescue when they donated their sick-leave time to her.

But Sharon Banks didn’t recover as she had hoped, so she began to negotiate with AC Transit officials to allow her to retire with full health benefits. She not only needed the medical insurance for herself, but also for her husband Paul, because he has prostate cancer and heart problems. But AC Transit officials resisted her request because she was a few months shy of the minimum ten years on the job needed to qualify.

While the AC Transit board was playing hardball with Sharon Banks, it decided to give Fernandez a substantial raise. According to testimony by former board member Alice Creason at the arbitration hearing, Fernandez had indicated that he would seek employment elsewhere unless he got more money. As this newspaper has previously reported, Fernandez has had personal financial problems over the years, including a 1997 bankruptcy. So in November 1999, the board agreed to raise his salary from $144,000 annually to $170,000 and make it retroactive to January of that year. The board also subsequently gave Banks a raise from $147,500 a year to $170,000, but didn’t make it retroactive.

By December 1999, Sharon Banks’ health was deteriorating. Paralyzed from the neck down, she had hoped to hang on until her ten-year anniversary in March 2000. But she didn’t make it. She died on December 26. Paul Banks requested her retirement health benefits, but AC Transit officials promptly refused, pointing out that she was still nine weeks shy of making her ten years.

Michael Foster, a private attorney hired by AC Transit to defend the agency against Paul Banks’ lawsuit, did not return a phone call seeking comment for this story. But according to court documents, he argued during the arbitration hearing that the agency was within its legal rights to deny Sharon Banks’ retirement health benefits and retroactive pay. Paul Banks’ attorney, Omar Krashna, countered that AC Transit officials had treated Sharon Banks unequally because of her gender. In an interview, Paul Banks also noted that after his wife died, the agency continued to treat Fernandez better than her, even though the agency has struggled under his command, lurching from one financial crisis to the next (see “The Buses from Hell,” January 23).

In fact, the agency’s board has repeatedly awarded Fernandez large salary increases over the years. In August, the board raised his pay again to $275,834 a year, plus gave him two bonuses totaling $30,000. During his eight years of running AC Transit since he officially took over in January 2000, Fernandez’ pay has increased by 62 percent. By contrast, Banks’ pay went up 32 percent during her eight-year tenure as general manager from 1991 to her death, court documents show. In addition, the Express has reported that the agency gave Fernandez two loans totaling $500,000 so that he could buy a house (see “The House That AC Transit Bought,” March 5).

However, it’s not as if Paul Banks has come away empty-handed. According to court documents, he received a total payout of about $666,553 from Sharon Banks’ life insurance policy, a workers’ compensation settlement, and deferred compensation from AC Transit. Paul Banks said that most of that money went to pay his own medical bills to treat his heart problems and his cancer, the latter of which is now in remission.

In the end, Arbitrator Knapp agreed with AC Transit that the agency had the legal discretion to deny Sharon Banks’ retirement health benefits. Knapp said Paul Banks could not prove that his wife had been discriminated against because there were no other cases of a general manager dying just before reaching his ten-year anniversary. But Knapp ruled that the agency had violated the state’s equal pay law. Knapp said AC Transit should have awarded Sharon Banks the same retroactive pay that it gave Fernandez in 1999, because they both held the identical rank in the agency. The arbitrator, however, left it up to Paul Banks and AC Transit to work out exactly how much the agency owes him.

According to Paul Banks, the agency has still not paid her estate the retroactive pay. He said AC Transit has offered about $19,000, but he and his lawyer, Krashna, believe the agency may actually owe more because they said agency officials have yet to provide them with documents that show whether Fernandez also was awarded retroactive benefits, such as sick pay. “It’s the principle of the thing,” Paul Banks said of why he’s still fighting the agency after all these years. “Sharon suffered. She was marginalized.”

A Big Payout

Speaking of AC Transit lawsuits, the agency has agreed to pay more than $2.5 million to Berkeley resident Pamela Daniels. As readers of these pages may remember, Daniels, a former library assistant in the University of California’s President’s Office, lost her left leg to a Van Hool bus — the expensive, and controversial Belgian-made coaches (see “The Buses from Hell,” January 23).

Daniels fell in September 2005 while riding a Van Hool in downtown Oakland. She was attempting to step up to the bus’ elevated platform seating when the driver pulled away from the curb, and she sprawled to the floor. She aggravated an old injury and a nasty infection took hold. “She ended up getting a below-the-knee amputation,” said her attorney, Miles Cooper.

AC Transit General Counsel Kenneth Scheidig contended that Daniels’ case was not proof that the Van Hools are unsafe, and noted that the legal battle rested mostly on the driver’s actions. Nonetheless, the agency and its insurers decided it was better to forgo a trial and agreed to pay the 51-year-old Daniels a lump sum of $1.87 million, plus $4,000 per month for the rest of her life, with the first fifteen years guaranteed, according to documents obtained from AC Transit through a California Public Records Act request.


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