The Berkeley Rent Stabilization Board has 24 employees and a $6 million budget. Photo: Pete Rosos

The Berkeley Rent Stabilization Board paid $210,000 in October to settle a complaint filed by a former employee who alleged she experienced “inappropriate and harassing conduct” by a co-worker while working at the agency. After the employee formally complained to Berkeley’s Human Resources Department about her treatment on Aug. 6, 2019, she alleged she “was retaliated against by Employer,” according to the settlement agreement, which Berkeleyside obtained after filing a Public Records Act request.

The payment appears to have put an end to a year-long investigation into the inner workings of the rent board, an investigation that prompted the nine elected commissioners to place the long-time executive director on administrative leave, led to his early retirement, and led to the expenditure of at least $340,000 in legal fees and payments, which were indirectly funded by fees paid by 2,800 of Berkeley’s property owners.

The settlement agreement dated Oct. 17, 2020, identifies the former employee but not the alleged harasser or the person who allegedly retaliated against her. But a comparison of information in the settlement to other information in the public record as well as documents gotten through Public Records Act requests strongly suggests the person who is alleged to have retaliated against the former employee is James “Jay” Kelekian, the former executive director.

Within a month of the filing of the complaint, Kelekian had recommended that the former employee’s job be cut in half. By November 2019, three and a half months later, he had suggested the position be eliminated, according to rent board staff reports. (While the executive director recommends staffing levels, the elected commissioners must approve any staffing changes.)

Kelekian, in a text message to Berkeleyside, denied he retaliated against anyone.

“If Berkeleyside makes such an assumption they would be grossly incorrect,” he texted.

Both Paola Laverde, who was chair of the rent board in 2020 during the investigation into Kelekian’s performance, and Leah Simon-Weisberg, the current chair, have declined to discuss what both have referred to as a “confidential personnel matter.”

The $210,000 agreement

In the agreement, the rent board paid the former employee a total of $210,000 disbursed in three different batches. One check for $72,891 went for attorney’s fees and costs, according to the settlement. One check for $57,000 went to medical expenses and the third for $80,109 was for emotional distress, according to the agreement.

While the rent board agreed to pay the former employee in order to settle the dispute and avoid protracted litigation, it did not admit any culpability or liability on the part of the rent board, according to the settlement agreement.

“This document is a result of compromise,” the agreement reads. “Nothing in this Agreement …will constitute an admission by Employer or Employee of … liability to the other nor will it constitute an admission of failing, shortcoming, negligence… by Employee and Employer to one another.”

The former employee agreed to release the Rent Board from future claims. The employee also agreed to withdraw any complaints filed with the state or federal government fair housing and employment commissions. A Berkeleyside check with the state Department of Fair Housing and Employment in July did not turn up any complaints filed against the Rent Board or Kelekian.

The abrupt departure of Jay Kelekian and allegations of retaliation

Why did Kelekian, who worked for the city of Berkeley for 36 years, 19 of those at the rent board, leave so abruptly in mid-2020? He had a contract with the Rent Stabilization Board through 2023. And prior to being put on administrative leave by the commissioners on April 24, 2020, he indicated that he might retire in 2021. However, he announced his retirement on May 24, 2020, and left on June 2. His salary in 2020 was $220,696.

The settlement agreement offers some clues about what may have happened. It states the former “Employee further alleged she was retaliated against by Employer for filing her initial complaint.”  The employee filed the complaint about allegedly being harassed on Aug. 6, 2019.  Within three and a half months, the employee was out of a job.

On Aug. 15, 2019, a little more than a week after the complaint was filed, Kelekian went to the rent board’s Budget and Personnel Committee and recommended that the employee’s position go from full-time to half-time, according to a staff report prepared for the meeting. The rent board had considered the position as a full-time one since 2015, according to board documents. In 2014, it was funded at 0.85-time.

On Nov. 21, 2019, Kelekian submitted new staffing guidelines to the entire board. In them, the employee’s half-time position had been eliminated, according to the agenda. (The employee had actually already resigned, and Kelekian noted in his memo the position was vacant). The board passed the item on the consent calendar.

The elected commissioners often address staffing issues once or twice a year – in June, when it must approve the budget for staffing levels, and sometimes in November or December to make adjustments. In 2016 and 2018, the board only reviewed staffing levels once. In 2017, it considered them twice.

Yet in 2019, the board considered staffing changes four times – in June, August, November and December, according to board agendas. Two of those times included changes to the position held by the employee who filed the complaint.

Kelekian did not draw particular attention to the elimination of the position held by the employee. He told the board that figuring out the staffing levels had been difficult that year.

“Developing the proper staffing model for the Program in FY 2019/20 has been a particularly arduous, iterative, time-consuming and confusing process,” Kelekian told the board in a Dec. 19, 2019 report. “Since last spring, I have worked continually (almost continuously) … to find the right mix of FTE’s in the appropriate classifications to best meet our changing needs and organizational realities. We are trying to strike the appropriate balance both for the short-term and the longer-term needs of the agency.”

While the findings of the investigation into the employee’s complaint are confidential, the elimination of her position was flagged as an issue, the settlement agreement suggests.

Kelekian said he would never do anything so egregious.

“I categorically deny ever retaliating against any employee or tolerating sexist behavior,” he texted Berkeleyside. “My entire life and career have been dedicated to actively fighting against overt as well as structural sexism and racism.”

Kelekian said the position has not been reinstated, which shows it was not needed and he was within bounds in eliminating it.

Yet the rent board voted to place him on administrative leave.

“The elected Board received information about a confidential personnel matter and immediately authorized a full and thorough investigation, Simon-Weisberg, the board chair, texted Berkeleyside. “At the conclusion of the investigation, the Board acted swiftly to remedy the matter. The Board has and continues to take proactive steps to ensure that this does not happen again.”

Kelekian declined to discuss why he was put on leave, even though he could, as no privacy laws prevent him from talking about himself.  “It is impossible to answer your question without breaching the legal and ethical confidentiality requirements,” he texted.

The investigation

In September 2019, the rent board launched an investigation into the employee’s complaint. Kelekian retained the Renne Public Law Group, (RPLG) which had a retainer contract with the city of Berkeley, to look into the harassment allegation, according to the RPLG’s contract and rent board agendas. The rent board agreed to reimburse the city for the costs, which eventually reached $30,000.

On Feb. 27, 2020, the rent board met in closed session “and was apprised of the need to continue ongoing personnel investigations being conducted by an outside investigator concerning Board employees.” It voted to spend an additional $100,000 for the purpose. A few days later, the rent board entered into its own, separate contract with RPLG to do “an investigation into an internal employee complaint” according to the engagement letter Ruth Bond, the lawyer who would lead the inquiry, sent to Paola Laverde, then chair of the Rent Board. The rent board also hired the law firm Sloan, Sasaki, Yeung and Wong to directly advise it on what to do. Timothy Yeung began to consult with the elected commissioners.

On April 24, 2020, the Rent Stabilization Board of Directors called a special closed session meeting to do a “public employee performance evaluation” of Kelekian. On April 28, Kelekian was placed on administrative leave. The board appointed Matt Brown, a staff attorney, as acting executive director. (The rent board has a position for deputy executive director, but it has gone unfilled for many years).

Kelekian announced on May 21, 2020, that he would retire effective June 2.

On Oct. 17, Brown signed the settlement agreement with the former employee. The rent board did not announce the agreement. It was only made public after Berkeleyside asked for it.

Apartment for rent in Berkeley. The Berkeley Rent Stabilization Board regulates 21,000 apartments in the city that house about 50,000 people. Photo: Frances Dinkelspiel

Total cost of investigation and settlement: $340,000

In addition to the $210,000 settlement, the Rent Board has expended at least $130,000 in hiring the two law firms to assist with the investigation and advise the elected board on what to do, according to invoices submitted.

The $340,000 in payments are coming indirectly from the pockets of Berkeley’s 2,800 landlords. The Rent Board oversees the regulation of about 21,000 apartments in Berkeley housing about 50,000 tenants. Property owners with units covered by the 1980 rent control stabilization ordinance pay an annual fee to the rent board for their regulation. The fee is currently set at $250 a unit and has been at that level for three years. About 90% of the rent board’s approximately $6 million annual budget comes from the $250 annual registration fee. The rent board included $360,000 for legal fees in its FY 2020/21 budget. ($40,000 of that was to contract with an outside attorney).  In June 2019, the board only allocated $7,500 for legal fees. If you take out the cost of the attorney, that represents about a 4433.33% increase in a year.

Gulbransen of the Berkeley Property Owners Association said the organization is concerned that apartment owners are paying for alleged transgressions of rent board employees and associated legal costs.

“Ultimately the landlords are paying for these settlements,” said Gulbransen. “We would consider that taxpayer-wasted money management. We are investigating and are looking at a possible lawsuit.”

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Frances Dinkelspiel, Berkeleyside and CItyside co-founder, is a journalist and author. Her first book, Towers of Gold: How One Jewish Immigrant Named Isaias Hellman...