First Jersey Credit Union law suit

By Joyce Moed, Reporter

WAYNE, N.J. – The former president/chief operating officer of First Jersey Credit Union here has filed a suit against the $104-million CU, claiming the she was fired for retaliation after she notified state examiners about expensive educational trips taken by the CU’s board members, which violated the credit union’s own travel expense policy.

In a suit filed in New Jersey state court, Joanne Lazzara says the several of the directors violated the credit union’s travel policy by going on lavish cruises around the world at the CU’s expense, and then fired her for flagging the violation. The cruises included credit union conferences to places including: Alaska, Panama, the Scandinavian, the Mediterranean, Hawaii, and the Bahamas.

After a new building was completed for the credit union in 2005, the CU used its liquid assets to pay for the completion, instead of taking a mortgage. According to the filed complaint, this resulted in a loss of liquid assets of approximately $200,000 each year. As a result of the construction, the CU’s expenses also increased. The real estate taxes on the new building to an additional real estate tax annually of more than $110,000. After the building was completed, Lazzara says she was presented with new goals to increase the CU’s net income. The complaint calls these goals “unrealistic and unachievable.” Lazzara said the defendant denied her request for a business development employee–in addition to cutting the marketing budget–which made it impossible for her to meet the goals she was set.

Meanwhile, unknown to the CU’s members, First Jersey CU had a policy to pay for educational travel expenses to its board members and its examining committee, the complain states. Each member was allowed to bring a guest.

Between 2004 and 2007, the travel expenses accrued totaled more than $220,000. One trip example was board member Bruce Grygus, who with his spouse traveled on an Alaska cruise and NJCUL conference in 2007, a trip that cost almost $13,000, more than double its $6,000-per-trip limit. Court documents also show that Board Chairman Edward Sinning went on a Scandinavian credit union conference cruise with his wife in 2007 and billed the credit union for $13,000. They reserved the most expensive cabin possible–an oceanfront suite with a balcony.

In 2007, the State of New Jersey audited First Jersey CU’s books and records, at which time Lazzara expressed her concern regarding the “escalating educational expenses,” that were not disclosed to the credit union’s members.

In early 2008, the travel expenses were eventually cited by state examiners and "lavish" and "gratuitous" and the directors were forced to repay anything over $6,000. As a result, the board changed its travel policy last year to restrict out of state trips and the number of people who could travel at the same time, and also removed the dollar limit for expenses. The board claims that because the original policy was written several years ago, it was outdated and not remembered by everyone, as a reason for violating their own policy.

Later that year, Lazzara was given her annual review, which that and her bonus was much below her previous reviews. She was told the reason was that she did not meet the goals set out for her–the same goals Lazzara said the CU made it impossible for her to meet. Even later that year, Lazzara was let go from the credit union after being told she did not have “the same vision” as the board.

Lazzara’s lawsuit claims her termination was a direct result of her flagging the education travel expenses to the state.

According to Robyne LaGrotta, Lazzara’s attorney, Lazzara was stunned when she was fired, and said that she had always received favorable job reviews and “really good raises.” The credit union walked her to car in September, after telling her they would not be renewing her contract, which was set to end Dec. 31, 2008. She was paid through the end of her contract.

“She didn’t have any bad reviews, and although the board says they had been talking about terminating her employment for a while, there is no documentation of that,” LaGrotta said. She said she has subpoenaed for copies of emails that where exchanged between board members, as the board members claim this is where the early discussion of LaGrotta possibly being let go took place.

Credit union officials did not return phone calls or emails seeking comment on the suit. The credit union, which serves current and former postal workers, denies Lazzara was let go as retaliation, and disputes the characterization of the trips, LaGrotta said.

LaGrotta said that in “an ideal world” she would love to see the all of the current board members resign, and for Lazzara to be paid for her lost salary until she can find comparable employment. She noted that today’s economy is making it difficult for Lazzara to find a position comparable to the CEO position she held at First Jersey CU.

What she does hope for is a fair amount compensation for her time being out of work, which is still ongoing, and legal fees. “Ideally, we would like if they reinstated her position and paid her retroactive and legal fees. They said ‘no.’”

“Our issue isn’t just the travel,” LaGrotta continued. “It’s that they are spending members’ money without their knowledge.

Lazzara began working for First Jersey Credit Union as an assistant manager in 1996. Within one month, she was promoted to manager, and later to president.