UC Davis cuts deal to avoid bias suit

Ex-vice chancellor gets $205,000 job -- regents didn't know

By Todd Wallack, Tanya Schevitz, SF Chronicle Staff Writers, Dec. 19, 2005

When UC Davis Vice Chancellor Celeste Rose resigned under pressure last summer, the university gave her a new job with a new title, a $20,000 a year raise -- and very little responsibility. In fact, Rose, 55, isn't required to do any work at all.

As part of a secret legal settlement negotiated to avoid a potentially embarrassing lawsuit, UC Davis promised to keep Rose on the payroll as the "senior adviser to the chancellor" for two years at an annual salary of $205,000, plus all the benefits of a senior manager, including health care, severance pay and a growing pension.

Yet her new job has no formal job description or regular duties. She gave up her office on campus. And UC promised not to fire her, no matter how little she does. If Rose quits, she is still entitled to receive the remainder of her two years' salary under the agreement.

In addition, UC Davis agreed to give her a $50,000 "transition payment" to help her find a new job, a letter of recommendation and a promise to tell reporters that she voluntarily resigned from her old position.

But in apparent violation of university policy, members of the governing Board of Regents were not told of the settlement and were not asked to give their approval. In fact, the June 1 agreement was handled so quietly that UC Davis spokeswoman Lisa Lapin said only a few people on campus know about it.

"It's another instance of high compensation not being disclosed," said UC Davis law Professor Daniel Simmons, chair of the UC Davis Academic Senate. "This is the kind of disclosure that harms the university, because these issues always become public at one point or another."

As The Chronicle reported last month, the University of California last fiscal year gave employees hundreds of millions of dollars in bonuses, administrative stipends and other hidden compensation. In the wake of those stories, the Legislature has scheduled hearings into the issue next year, and UC President Robert Dynes formed a task force to look at revising the university's disclosure policies.

Regent Joanne Kozberg, who was named co-chair of the task force, said she'll have the group look into why regents weren't told about the UC Davis agreement.

"If there is a policy, it has got to be followed," Kozberg said. "If there is a violation, it needs to be looked into."

Rose's attorney, Melinda Guzman, said Rose received the settlement after threatening to sue the university for racial and gender discrimination. Rose is African American.

The dispute began in February when UC Davis Chancellor Larry Vanderhoef told Rose in a private meeting she needed to resign at the end of June. Guzman said Vanderhoef didn't offer a reason for the decision, which Guzman claims is part of a pattern of discrimination at the campus.

"The facts were compelling," Guzman said. UC has had a "repeated failure to either recruit or retain minority executive managers at the UC Davis campus."

UC Davis officials denied they discriminated against Rose or any other executives. But citing privacy rights surrounding personnel issues, they said they could not comment on Rose's claim that she was essentially fired without a reason.

"If she and her attorney wish to say things, that's their right," said Dennis Shimek, associate vice chancellor of human resources at UC Davis. "But that doesn't make what they are saying accurate."

Regardless of the merits of her claims, UC Davis quickly agreed to settle.

Campus officials declined to put a dollar value on the agreement, but it could be worth more than half a million dollars, including benefits. The salary and transition payment alone add up to $460,000. In addition, it could potentially give her an additional $20,500 in severance and boost her annual pension by as much as $17,000 a year.

UC said the regents were never told of or asked to approve the settlement, despite two policies that seem to require it.

Under university policy, two key regents (the board chairman and the chair of the finance committee) must approve settlements of litigation or legal claims of more than $250,000, including those that do not involve a lawsuit. And the full board must approve settlements of more than $500,000.

But UC spokesman Paul Schwartz said there was no need for them to know about the accord. That's because, he said, it's actually a "separation agreement" -- not a settlement.

However, both the text of the agreement and the cover letter provided by UC Davis refer to the deal as a "settlement agreement." Rose's attorney called it a settlement agreement. And both sides said the deal was prompted by Rose's legal claims of racial and gender bias. Rose agreed to drop those claims as part of the agreement.

Separately, the regents are supposed to approve any raises or new appointments involving a salary of $168,000. Rose's new salary of $205,000 was well above that threshold.

Schwartz didn't offer any explanation for why the regents didn't review her new salary.

Regardless of what the policy says, Regent John Moores said that the regents should have been told.

"It should be UC policy to fully inform the regents of the settlement of all litigation, whether real or threatened," Moores said.

It's unclear how many other similar agreements UC has signed without notifying the regents or the public. Schwartz said there have been others, but couldn't say how many.

Meanwhile, Rose's attorney says her client is ready to work, but is still waiting for her first assignment.

She said UC Davis has only approached Rose about one possible project since she started the new job July 1, and the details were vague.

UC Davis officials countered that they asked Rose to work on several assignments, but Rose rejected them. According to the legal settlement, Rose and Vanderhoef, the UC Davis chancellor, must mutually agree on any duties.

Still, both Rose's attorney and UC Davis agree that it was the school's idea to give her the new job as a special adviser.

UC Davis officials said they wanted to take advantage of her extensive experience, which includes 22 years working for the university system. Rose spent seven years as UC Davis' vice chancellor of university relations.

"Celeste has considerable expertise in government relations and in fundraising," said Vanderhoef. "In her new role, she will continue to help us refine our campaign initiatives as we prepare to launch our first comprehensive fundraising campaign."

However, Guzman, Rose's attorney, said UC Davis only offered her the new post "when faced with a complaint and the threat of a lawsuit."

E-mail Todd Wallack at and Tanya Schevitz .

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