A CEO is suing her credit union and its board chair, a NorthCarolina state representative, who allegedly engineered hertermination, cursed, yelled and belittled her at board meetings andclaimed that he was responsible for the credit union's financialturnaround during the annual membership meeting in March.

Betty Eileen Donovan, 64, who worked at the $55.4 million BraggMutual Federal Credit Union for more than 30 years and wasappointed its president/CEO in November 2015, filed a federallawsuit last week in a U.S. District Court claiming theFayetteville, N.C.-based cooperative discriminated and retaliatedagainst her which led to the former executive's wrongful dischargein February.

What's more, the lawsuit singled out John Szoka, the BraggMutual FCU's board chair and a Republican state representative ofNorth Carolina's 45th district, which includes CumberlandCounty.

Donovan's lawsuit alleges Szoka and the credit union “repeatedlyengage[d] in unlawful conduct towards Ms. Donovan.”

The lawsuit specifically claims that Szoka and six other boardmembers failed to comply with the Federal Credit Union Act'srequirements that the board make decisions based on what is in thebest interests of the membership. Donovan also alleged that theboard did not produce complete and accurate minutes of boardmeetings to show whether it followed legislative and regulatoryrequirements in its deliberations.

The former CEO also claimed that the board failed to providespecific reasons for her termination and never gave her theopportunity to present her defense and to correct deficiencies.

According to Donovan, after meeting in a two-hour closed sessionon Feb. 15, board members told her she was being fired because they“no longer trusted her judgment.”

During her CEO tenure, Szoka “regularly displayed an unlawfulanimus towards Ms. Donovan (including based upon her age, genderand/or protected activity),” according to the lawsuit.

During board meetings, Szoka commonly yelled, cursed andbelittled Donovan without any justification; the state legislatoralso allegedly met with another board member to discuss hispersonal agenda to undermine Donovan's authority, according to thelawsuit.

In one example stated in the lawsuit, Donovan said she fired thecredit union's vice president of lending and marketing on January2. Donovan said she provided Szoka and the board a “good-faithbases” for her decision to fire the executive. Later that same day,however, Szoka allegedly rescinded the termination and reinstatedthe executive who is a close friend of the state legislator,according to the lawsuit. Skoda also allegedly falsely stated thathis decision was supported by the board, Donovan claimed in herlawsuit.

In the lawsuit, Donovan also indicated that she attended thecredit union's annual membership meeting on March 13.

According to Donovan, the members were not aware that she hadbeen fired and that all references to her leadership were deletedfrom the 2017 annual report.

During the membership meeting, Szoka was introduced as BraggMutual FCU president, and he took credit for the credit union's$950,000 net income gain at the end of 2017, Donovan claimed.

At the end of her first year as CEO in 2016, the credit unionposted a net income gain of $505,085 and a net income gain of$956,212 at the end of 2017, according to NCUA's financialperformance reports. Bragg Mutual also improved its net worth from11.89% in 2015 to 13.35% in 2017, while its ROAA jumped from a-0.21 in 2015 to 1.79% in 2017.

Donovan also is suing Bragg Mutual and Szoka under the NCUA'swhistleblower protections. The former CEO alleged that she wasretaliated against for reporting to the NCUA possible violations oflaw and regulations allegedly committed by Szoka and the creditunion.

Szoka and Bragg Mutual FCU did not return phone calls and emailsfrom CU Times that requested their comments for thisarticle. The credit union has not filed a response to Donovan'slawsuit.

Donovan is suing for unspecified compensatory and punitivedamages, as well as other costs.