A newly obtained settlement record shows former Colfax Police Chief Rick McNannay agreed to drop his pending lawsuit and resign last month in exchange for a $435,000 payment from the city and its insurance provider.
The agreement settled the approximately 18-month battle over McNannay’s disputed termination in January of 2019 that resulted in his eventual reinstatement last summer. Former Mayor Todd Vanek had fired McNannay over hiring practices from 2016. McNannay alleged his termination was retaliation for pushing back on budget limitations. Read our in-depth coverage of the controversy here.
McNannay, and his wife Marcia, had both previously filed claims seeking $5.2 million in damages for wrongful termination. The new seven-page settlement releases the city from those claims or other legal action.
“Mr. McNannay, Mrs. McNannay and City of Colfax agree that this Agreement constitutes no admission of wrongdoing on the part of any party to this Agreement,” the document states, “and no past or present wrongdoing on the part of any party shall be implied by execution of this Agreement.”
The settlement outlines a $435,000 payment from the city and its insurance provider to the McNannays and their legal team. The McNannays receive approximately $271,500 while the other $163,500 goes to the Dunn & Black law firm in Spokane.
McNannay agreed to resign as a requirement of the settlement. His resignation was effective as of March 16, the day the parties signed the agreement. He would then receive a final paycheck, including pay for unused vacation hours.
The Whitman County Gazette first reported McNannay’s resignation and a city council-approved settlment payment of $85,000. Whitman County Watch later filed a public records request for the full settlement with the Cities Insurance Association of Washington, which is administered locally by Clear Risk Solutions of Ephrata.
Clear Risk had previously conducted the city’s investigation into McNannay’s hiring practices that resulted in his termination. The city’s Civil Service Commission later questioned that investigation as part of its decision to overturn McNannay’s firing and reinstate him in July 2019.
The settlement dictated that all terms and payments would be “deemed confidential.” Parties could not discuss details except on a “need-to-know basis” with attorneys and tax advisers. The only other exception was in response to public records requests.
The CIAW released the settlement per our records request on Monday.
The final settlement also includes a non-disparagement clause restricting parties from making derogatory, inflammatory or false statements against the McNannays or city officials. The agreement covers the mayor, city clerk, city administrator, finance director, council members and city attorney.