A Mobile County circuit judge has ruled that the Bayou La Batre Housing Authority Board violated Alabama’s Open Meetings Act when its members privately agreed to employment contracts behind closed doors, the latest blow in a long-running legal fight over multimillion-dollar retirement payments awarded to the authority’s former director and her husband.
In a ruling published this week, Circuit Judge Wesley Pipes found that board members discussed and agreed to new employment contracts for former executive director Virginia Huddleston and Darryl Wilson during an executive session on Oct. 15, 2019, even though state law specifically bars public bodies from discussing the salary, compensation and job benefits of specific employees in closed session.
“Although they were later approved in normal session, there was no discussion, just a formal vote to ratify what had already occurred without any hint of what it was,” Pipes wrote.
A ruling that voids the contracts
The contracts at the center of the case have driven years of litigation between current and former Housing Authority officials over payments to Huddleston and attempts to claw them back. In his ruling, Pipes went beyond finding a procedural violation: he declared the entire July 9, 2020 amendment, which converted the couple’s retirement terms into lump-sum payments of $2.52 million for Huddleston and $1.66 million for Wilson, void and unenforceable, along with the retirement provisions of the 2018 and 2019 contracts.
Agreements and actions taken in violation of the Open Meetings Act are void under Alabama case law, Pipes noted, and the board’s executive session discussions of the Huddleston and Wilson contracts fell squarely within that prohibition.
How the payments came to light
A local news organization first reported on the contracts in 2020, after a complete turnover of the Housing Authority board and the resignations of Huddleston and Wilson. Newly appointed board members released documents showing the couple’s employment agreements had been repeatedly amended to increase their salaries and expand their benefits.
Transparency concerns flared again at a July 21, 2020, meeting where the board approved another contract addendum creating a combined $4.2 million lump-sum retirement package. A reporter was present for that meeting, where the multimillion-dollar addendum was approved without any public discussion, and requests for copies of the contract were denied or ignored.
Pipes also cited the authority’s own bylaws, which only allow executive sessions for purposes permitted by law and require the authority’s attorney to certify that a session meets legal requirements. That certification never happened, the judge found.
The board’s defense falls flat
Huddleston, Wilson and multiple board members argued that the contracts were created in cooperation with the authority’s board attorney at the time, Brent Day.
That argument ran into a sworn statement from Day himself. The defendants argued “the Board approved all of these contracts and amendments, and that they were either drafted, reviewed, or approved by the Authority’s attorney,” Pipes’ order states. “Mr. Day provided an affidavit denying he did any of these things and points to a letter he wrote to the Board advising that the sale of Safe Harbor may violate any number of laws and threatening to resign.”
Huddleston and Wilson attempted unsuccessfully to have the letter stricken from evidence, arguing that email records proved Day had been copied on correspondence between Huddleston and board members.
What the ruling means
The decision arms the current Housing Authority board with a court order invalidating the retirement obligations, which the authority could only have paid by selling Safe Harbor, its principal housing asset. It also establishes, on the record, that the negotiations that produced the payments were conducted in violation of the state’s open meetings law.
The ruling does not end the broader litigation, which continues over related claims and defenses. But it marks the most direct judicial rebuke yet of how the payments were crafted, and it gives public bodies across Alabama a pointed reminder that compensation discussions for named employees must happen in public, not behind closed doors.
Attorneys for Huddleston and Wilson can be expected to weigh an appeal. In the meantime, the authority’s board operates under new leadership determined to keep its business, including any discussion of employee compensation, in the open.
‘Attempted fleecing of public money’
In his order, Circuit Judge Wesley Pipes went further than the open meetings findings, describing the couple’s incrementally luxurious employment contracts as an ‘attempted fleecing’ of a public housing program launched with federal dollars. ‘The terms of these agreements are overreaching and patently unfair to the citizens the Authority was created to serve, and that the board was supposed to protect,’ Pipes wrote. ‘They are the definition of unconscionable.’
Pipes wrote that the authority’s five-member board ‘never exerted any restraint’ over Huddleston and Wilson as their salaries and benefits steadily increased. ‘It is incredible that the board of directors of a non-profit housing authority would enter into a contract with two seven-year employees to effectively hand them virtually all of the assets of the authority in the form of retirement,’ he wrote. ‘This payout is a windfall of epic proportions. It is the attempted fleecing of public money from a public authority with the apparent consent of the very Board appointed to protect it.’
How the packages grew
Beginning in 2013, Huddleston was paid $69,000 a year while Wilson was paid an estimated $31,000. Wilson left an unpaid seat on the authority board to work under Huddleston, whom he later married. By 2019, their salaries had grown to $120,000 and $80,000 respectively, with extensive paid time off, lifetime health insurance, and annual retirement payments of $100,000 for Huddleston and $70,000 for Wilson beginning in 2027. The July 2020 amendment converted those terms into lump sums of $2.52 million and $1.66 million — an obligation Pipes noted was equivalent to the assessed value of Safe Harbor, the authority’s only asset, which would have had to be sold to pay it.
‘Even if the Authority had the means to pay this out monthly, over years, Huddleston and Wilson only worked for seven years,’ Pipes wrote. ‘It would take decades to grow an IRA or 401k to comparable value in the private sector.’ The average income of housing directors nationwide is only about $48,000, according to data Pipes cited, and ‘there is no way to argue these benefits are reasonable when the Authority must liquidate its holdings to pay them.’
Huddleston’s defense
In her deposition, Huddleston admitted she requested the contract terms and defended them. She said the Bayou La Batre authority and Safe Harbor are ‘different than any other housing authority in the United States. There is no public funding. Every penny that has ever come in is from rent revenue, applications and background checks.’ She described fighting the city for the authority’s survival and said, ‘I know my worth, and I earned every penny of it.’
What remains for trial
The ruling is a critical blow to the couple’s counterclaim seeking to force the authority to honor the contracts, while leaving most of the authority’s claims intact for a jury. The lawsuit, filed by newer board members in December 2020, accuses former officials of misusing public housing assets, approving excessive compensation and paying out more than $150,000 to Huddleston and Wilson upon their resignation. Claims against Huddleston, Wilson and former board members Marcia Stork and John Joyner continue toward trial; summary judgment was entered against former board members Michael Goodwin and Annette Thornton, who never responded to the suit. Criminal charges once brought against Huddleston over missing flooring material were dismissed last year at the board’s request, and she has since sued Paul Burch — now Mobile County sheriff — and others over the related raid, seeking $2.5 million in damages.