Former city official countersuing Long Beach over separation payouts

Former Long Beach Corporation counsel and acting city manager Rob Agostisi has countersued the City of Long Beach and city council members, claiming retaliation, breach of contract and defamation related to the city’s payout scandal and dispute with the LGBT Network.

Agostisi filed his lawsuit Dec. 30 against the city and City Council members John Bendo, Karen McInnis, Elizabeth Treston, former councilmen Scott Mandel and Mike Delury, and city spokesman John McNally.

Agostisi is seeking unspecified damages, including attorneys fees, emotional and punitive damages and claiming breach of contract for 47 vacation days, 47 sick days and two personal days still owed to him by the city.

Long Beach city officials declined to comment on Agostisi's suit. City Council members voted last week to hire outside counsel to defend the city.

The lawsuit claims Bendo was working with State Sen. Todd Kaminsky (D-Long Beach) to oust political rivals by tarnishing them with the city’s payout scandal. He said Kaminsky was advising Bendo and council members to seek clawbacks of at least $750,000 in payments deemed illegal by the state comptroller’s office.

"Bendo’s vote and behavior vis-à-vis the 2018 separation pay bond was not motivated by principle. … Rather, it was designed to harm his perceived political adversaries like Agostisi," the lawsuit states

Agostisi’s lawsuit was filed 18 months after the city filed separate lawsuits seeking a combined $2.4 million from Agostisi and former city manager Jack Schnirman, claiming they oversaw a decade of overpayments of accrued vacation and sick time to management employees.

The city also filed more than a dozen lawsuits against other current and former employees for repayment of vacation and sick time.

The state comptroller’s office said the city had failed for more than 25 years to fix its separation payment policy, which exceeded city code on limiting vacation time to 50 days and 30% of sick time.

City Council members rescinded a response to the comptroller that detailed $3.1 million in separation payments to all former city employees and drawdowns of unused times to some existing employees.

Agostisi noted the city had a history of paying every employee, including 67 union and management employees, in excess of what the city code allowed from 2000 to 2011, showing a history of total payments to all employees before he was hired. The suit said the city would make advance payments to employees to reduce payouts later.

The city is seeking nearly $900,000 from Agostisi, claiming breach of fiduciary and fraud, as well as repayment of a $128,000 of accrued time in 2016 and return of wages during his tenure from 2006 to his resignation in 2019.

Agostisi left the city after serving as city manager for less than nine months to go to the Hauppauge-based LGBT Network. He accused the city of defamation for saying his payout investigation led to the LGBT Network's involvement with a restaurant owner's dispute over rainbow pride flags on the Long Beach Boardwalk.

"As concluded by the state comptroller, the separation pay practices extend decades prior to my client’s tenure. Over the years, hundreds of employees benefited from such practices," Agostisi's attorney Rick Ostrove said. "The City Council has wasted hundreds of thousands of dollars on its misguided venture to advance individual council members desire to exert political retaliation. They will never win their lawsuits. It’s just a question of how much taxpayer money they are going to spend before the lose."

By John Asbury

john.asbury@newsday.comJohnAsbury

John Asbury is a breaking news and general assignment reporter. He has been with Newsday since 2014 and previously worked at The Press-Enterprise in Riverside, California.