Rolling Meadows to pay $250,000 to settle fired manager's lawsuit

Rolling Meadows aldermen agreed Tuesday to pay $250,000 to settle the federal employment retaliation lawsuit filed by former City Manager Barry Krumstok.

Krumstok will get a third of that amount, or $83,333.33, in compensatory damages, and his attorney Keith Hunt's law firm, Hunt Law, will get the other two-thirds, or $166,666.67, for attorney's fees and costs, under terms of a 10-page general release and settlement agreement approved by the city council.

The payment, authorized on a 6-0 vote of aldermen without any discussion Tuesday night, will be made on the city's behalf by its insurance coverage provider, the Intergovernmental Risk Management Agency. City officials say the payment won't affect the city's budget or residents' taxes.

In exchange for receiving a check on Jan. 7, 2022, Krumstok will dismiss his lawsuit with prejudice and release the city, its insurance provider and Mayor Joe Gallo of any liability and claims, according to the settlement.

Krumstok sued the city and Gallo July 12, a day before the council voted 5-2 to fire him. The longtime manager said in the suit that the mayor put him on administrative leave and asked for his resignation days before, as a result of a personal vendetta dating to 2019.

Krumstok had written a report that found then-Alderman Gallo harassed another council member; Krumstok contended that since becoming mayor in April 2019, Gallo had threatened to fire him multiple times in retaliation.

Gallo denied the accusations, and the council later gave Krumstok a list of nine reasons they voted to fire him, including a lack of alignment with the council's vision for the city and resistance to change.

Krumstok, who is Jewish, also alleged religious discrimination in his complaint, saying the mayor had commented inappropriately when he took time off for religious holidays. In an earlier statement, Gallo said he "remains resolute in his support of diversity and inclusion."

In the settlement agreement, Gallo and the city said they have denied and continue to deny Krumstok's allegations, and that the payment is being made merely to avoid further litigation.

The agreement also bars Gallo, aldermen and Krumstok from making additional comments to the media about the settlement, its terms, or how it was negotiated, outside of the Sept. 24 joint news release. They also can't post about it on social media.

Krumstok, a city employee for 22 years and manager for the last 11, had seven months left on his $195,794-a-year contract when he was fired. The agreement says his employment with the city has ceased and the city doesn't have any obligation to rehire him. But both parties could later mutually waive that provision.

In the meantime, it appears Krumstok's next gig could be at the Solid Waste Agency of Northern Cook County, an intergovernmental consortium of 23 municipalities including Rolling Meadows.

Under terms of the settlement, the city's representative on the agency board will vote to support Krumstok's employment if called upon at a board meeting, and Gallo and city officials won't try to persuade other member communities to reject Krumstok's application for employment.