Highmark defends its actions following arrest of Melani
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Highmark on Wednesday characterized the behavior of recently fired CEO Kenneth Melani as "willful and gross misconduct" in its first detailed statement on the events leading up to his Sunday ouster.
Dr. Melani's attorney, Sam Cordes, promptly countered that if Dr. Melani violated any company policy, he was never made aware of that.
Mr. Cordes said Highmark is just looking for pretexts for what he contends was a retaliatory, and perhaps discriminatory, firing. "You don't get to make up reasons [for firing someone] later," he said.
Highmark, in its statement from spokesman Michael Weinstein on Wednesday, dealt with both the March 25 arrest of Dr. Melani at the home of his mistress's husband and his monthslong relationship with Melissa Myler, a sports marketing professional who joined the company in October.
Highmark's statement said: Dr. Melani's "willful and gross misconduct includes not only the behavior that is alleged to have occurred on March 25, but also the admitted sexual relationship with a junior employee of the company and the conflict and risk to the company associated with that relationship, as well as repeated denials to senior management regarding that relationship."
The statement continues: "The injuries resulting from Dr. Melani's gross and willful misconduct include injuries to the Blue Cross Blue Shield brand, the company's reputation, risk to business partners and financial harm."
Highmark denied earlier statements by Mr. Cordes that the board ordered Dr. Melani to fire Ms. Myler.
The insurer said the issue of the workplace relationship came to a head in early March. "Dr. Melani was informed that in accord with company policy, he had an option of either his leaving the company or Ms. Myler leaving the company," its statement said.
"Highmark's statement is not true," Mr. Cordes said. He said Dr. Melani told Highmark board Chairman J. Robert Baum, who is now interim CEO, about his relationship with Ms. Myler in late February. He said that around Feb. 29, Mr. Baum "approached Dr. Melani after a meeting, and said, 'There are ways of getting her out.' "
Dr. Melani, according to Mr. Cordes, viewed any effort to dismiss Ms. Myler as illegal, and he offered to resign instead. "They told him, 'You're too valuable,' " Mr. Cordes said. " 'No, no, no. You're too important to this company. There's too much going on.' "
Highmark is trying to buy West Penn Allegheny Health System and jousting in public and in court with UPMC.
Mr. Cordes said the company's head of human resources confirmed to Dr. Melani that either he or Ms. Myler must go.
Highmark's statement said it "has a non-fraternization policy which prohibits the type of conduct to which Dr. Melani and his attorney have confirmed did occur." Highmark did not respond to a Pittsburgh Post-Gazette request on Tuesday to provide its policy on relationships between employees.
Mr. Cordes said that if there was a policy, "the president of the company did not know there was a policy."
"When [Dr. Melani] was approached by the chairman of the board, it was not a situation where there was a violation of a policy," Mr. Cordes continued. "It was, 'This doesn't look good.' "
He said it was telling that the board didn't fire Dr. Melani until a month after his conversation with Mr. Baum, suggesting that such a delay would not have occurred if the CEO had really engaged in misconduct.
Also, Highmark denied reports that it was creating a "difficult work environment" for Ms. Myler, who returned to her office Tuesday after a period of absence.
"Highmark is taking many steps to provide Ms. Myler with an appropriate work environment in which to perform her work functions," the insurer wrote. "Ms. Myler has not presented to Highmark any complaints to indicate that she is being shunned by managers, creating a difficult work environment."
Mr. Cordes said Highmark has been "closely supervising her, people looking at her calendar who have no dealings with her whatsoever. ... She's been subjected to some very close scrutiny."
He said it was too early to tell whether she faced a hostile work environment, something that can become the subject of a lawsuit.
Dr. Melani spent 22 years at Highmark, nine as CEO. He faces charges of simple assault and defiant trespass for a fight with Ms. Myler's husband at his Oakmont home March 25. A preliminary hearing that was set for Wednesday was postponed so Dr. Melani can enroll in counseling, which could lead to the charges being dropped and expunged.
Employment law experts have said that if Highmark ordered Dr. Melani to fire his mistress, and he refused based on concerns that it would be discriminatory, that could form the basis of a retaliation claim.
Since Highmark fired Dr. Melani but not his younger and female subordinate, he could argue that he was discriminated against on the basis of age or gender, unless Highmark has a consistently enforced policy of firing the more senior partner in a workplace affair.
"Dr. Melani's and Ms. Myler's attorney has suggested that he is ready for war in the courtroom," Highmark's statement said of Mr. Cordes.
"Highmark will answer all remaining questions of the attorney for Dr. Melani and Ms. Myler in the appropriate legal forum."
Mr. Cordes said he and his clients "have not chosen the forum in which we will do this if we have to."
First Published April 5, 2012 12:24 am