NKU paid former worker $200K to avoid sex lawsuit

HIGHLAND HEIGHTS – Northern Kentucky University paid the subordinate of convicted embezzler Scott Eaton nearly a quarter of a million dollars two years ago to avoid a potential sexual harassment lawsuit and gained that worker's subsequent silence – the only such settlement NKU reached in the wake of the Eaton scandal, The Enquirer has learned.

Former NKU associate athletic director for compliance Chrissy Soards first complained to the school about the behavior of her boss Eaton in early March 2013, school officials acknowledged last week. The Enquirer previously reported that the first phone call about Eaton came in on March 8.

On March 16, the school fired Eaton for ethics violations, and two days later, Soards signed the $200,000 settlement agreement. The Enquirer obtained the agreement through a series of open records requests.

NKU later discovered Eaton stole $311,000 from NKU using a university-issued credit card, and that he had inappropriate relationships with at least four women on campus, including an adult student.

The university has steadfastly refused to identify the women involved, although Board of Regents chairman Dennis Repenning this week acknowledged to The Enquirer that Soards and her attorney had threatened the school with a sexual harassment lawsuit.

Repenning also said Soards' initial complaint threatened legal action and was the first sign anything was amiss with Eaton's behavior.

"This was the first we had heard about Eaton's activities ... prior to that, we thought he was a Boy Scout," said Repenning, an Erlanger-based lawyer. "He seemed to be everybody's favorite. Once we learned of this activity, this whole house of cards just fell apart.

"And I would not accept any characterization that we bought this woman's silence ... that would be incredibly unfair to the individual involved."

Eaton pleaded guilty to felony theft charges in April 2014 and is serving a 10-year sentence in the Campbell County Detention Center in Newport.

Soards resigned from the school on March 25, less than two weeks after Eaton was fired. The settlement prohibits Soards from suing the school or helping anyone else sue the school. It was signed on March 18, 2013, and the payments were to be made by April 1, 2013. It also referred to a pre-existing and unrelated workers' compensation case Soards brought against the school. She is still eligible for her retirement benefits through the Kentucky Retirement System.

"Soards agrees not to hereafter initiate a lawsuit based on any claims released by her ... be party to such a lawsuit, or in any way assist or cooperate with any other person or entity of any kind or nature against NKU," the agreement states. It also requires her not to speak about the agreement and "not to make any statements or remarks that are disparaging toward" NKU or anyone at the school.

Repenning said the settlement "was a big deal for us ... this was no drop in the bucket."

"Two hundred thousand bucks is nothing to sneeze at and, as a lawyer myself, that is not a small number," Repenning said. "Look at what she was making and we are talking about three years of her salary and benefits."

NKU settled quickly, now seeks reimbursement

At the time of the settlement, Soards was NKU's athletic compliance officer, making sure the school adhered to all the rules set forth by the National Collegiate Athletics Association (NCAA). She started working at the university in 2005, according to her personnel file, also obtained through open records requests.

Reporting directly to Eaton, Soards was earning $55,017.96 annually when she left the school. That's 24 percent more than the $44,195.64 Soards earned in 2010, although she received a 13.6 percent boost later in 2010 that was part of a campus-wide pay raise program.

Soards declined comment through her attorney Barbara Bonar of Covington, citing the settlement's confidentiality clause. Bonar also declined comment on the case, including when Soards initially threatened a lawsuit against NKU, citing the same confidentiality clause. Bonar also said she had no knowledge of Soards' claim for workers' compensation and that it predated her other legal issues with NKU.

"We did not represent her on that case," Bonar said.

NKU president Geoff Mearns, who approved the final agreement, deferred comment to university spokesman Chris Cole.

The settlement was made "to eliminate any possible distraction or reduction in resources as we investigated the full damage done to the school by Scott Eaton," Cole said.

The document itself does not list specific issues with the school. Coles declined to say whether Soards was romantically involved with Eaton.

"We have released a lot of information about this case but one thing we have remained consistent on is our commitment to respect the privacy of the other individuals involved, so therefore we will not release their names," Cole said. "This is the only settlement agreement that was made in connection with the investigation of Scott Eaton."

After Soards' initial contact in early March 2013, Mearns asked the school's board of regents for guidance, Cole and Repenning said. Mearns then approved the final settlement.

"This all happened very quickly ... within a matter of weeks," Cole said. He added that the school also was bound by the agreement's confidentialty clause, which he said prohibited NKU from discussing the settlement unless "bound by law."

Cole also declined to discuss Soards' workers' compensation case, citing privacy laws, saying only that it was unrelated to the Eaton situation.

NKU is part of the state public university system, which is funded in part by tuition, student fees and state/federal tax dollars. The school has a budget of about $225 million annually.

The school is seeking reimbursement from Eaton as well as its insurance company for both the stolen money and the $200,000 settlement with Soards, Cole said. Like most major public institutions, NKU has an indemnity insurance policy to cover lawsuits, settlements and thefts.

"We know that we will recoup some of that settlement from the insurance company, we just don't yet know how much," Cole said.

Possible violation of open records laws

The university initially denied The Enquirer access to any documents surrounding Soards or Eaton two years ago, citing the ongoing investigation at the time. Cole, however, said there is no record of any initial specific requests for settlements associated with the case from 2013.

NKU again denied access to the agreement when The Enquirer specifically requested any settlements with Soards or others involved with the case in an October 2014 open records request. NKU said the request sought "forty plus years" of settlement records, and that it "places an unreasonable burden" on the school. The document was produced only after The Enquirer threatened legal action last month to enforce its right to access the public record.

"We acknowledge that there was a misinterpretation of the request and once we realized that the request was more narrow than we originally thought, we produced the document within a week," Cole said.

The Enquirer's Fort Mitchell-based attorney, Lyn Hils Mathews of the firm Graydon Head, said NKU's initial response violated state open records law, but it was unclear if the settlement agreement had been willfully withheld by NKU.

"We hope that NKU will put systems in place in the future to allow it to make an efficient and good faith search of its records to provide a complete response to a records request the first time around," Mathews said. "Neither The Enquirer nor the public should be forced to obtain legal counsel just to gain access to non-exempt public records."

Settlement was 'money well spent'

Eaton declined visit requests made to him at the Campbell County Detention Center.

His actions and the subsequent scandal rocked NKU during Mearns' first year at the school. Repenning said he and other board members wanted to "move on" after Eaton was fired for the sexual misconduct. But he credits Mearns for going back and taking a deeper look at the finances of the athletic department.

"We obviously thought it was appropriate to terminate him (Eaton), and we were all ready to turn the page," Repenning said. "We thought there was no way in hell that he was actually ripping us off financially. I am so glad Geoff went back and did that review and I think Geoff's handling of this has been pretty good throughout.

"In hindsight, this (settlement) was still money well spent and I would do it again under the same circumstance," Repenning said.

The school has since fired another employee, dance team coach Jennifer Hilvert, also for using school credit cards. Hilvert racked up nearly $7,000 worth of air travel and was fired in June 2014. She has since paid back $5,300 of the $6,800 taken, and NKU did not refer the case for criminal prosecution.

Campbell County commonwealth attorney Michelle Snodgrass asked for a follow-up investigation that could result in criminal charges for Hilvert after reading about the case in The Enquirer. Snodgrass declined comment on the ongoing investigation, now being conducted by the NKU police department.

In an interview last month, Mearns declined comment on the Hilvert case, including why he didn't turn the case over to prosecutors, citing the current investigation.

NKU AND EATON SCANDAL TIMELINE

March 8, 2013 - Chrissy Soards or her attorney approaches NKU administrators, threatening a possible sexual harassment lawsuit in conjunction with the actions of Scott Eaton.

March 16, 2013 - NKU president Geoff Mearns announces the firing of Eaton for "ethical violations." Those included affairs with NKU employees, including subordinates, as well as at least one adult-aged student. Mearns also immediately launches a financial review of the athletic department.

March 18, 2013 - Soards signs a settlement agreement for $200,000. In return, she agrees to not sue the school or help anyone else do so. She also agrees to remain silent on the agreement itself and not speak out against NKU or anyone who works there.

March 25, 2013 - Soards resigns from the school.

April 1, 2013 - The agreement calls for Soards to receive her settlement.

April 23, 2013 - NKU announces that Eaton had misappropriated at least $150,000 while serving as athletic director and turns the investigation over to police.

Sept. 12, 2013 - NKU tells its Board of Regents that Eaton had actually stolen $311,000, primarily by using the school-issued credit card, spending more than $260,000 on Kroger gift cards. He also would buy products through the school's procurement system and then return the items to the store and personally pocket the proceeds.

April 17, 2014 - Eaton pleads guilty to theft charges and receives a 10-year prison sentence, which he is currently serving at the Campbell County Detention Center.

Oct. 24, 2014 - The Enquirer asks for a copy of any settlement agreements between the school and Soards or others involved with the case.

Jan. 30, 2015 - NKU releases a copy of the settlement agreement to The Enquirer after threat of legal action.