A former Old Orchard Beach town employee has filed a lawsuit against the town alleging she faced discrimination and retaliation after reporting financial irregularities.

In her lawsuit, Kelly Roy said other town employees violated the Maine Human Rights Act and the Whistleblower Protection Act by threatening to fire her or reduce her hours after she wrote a memo outlining problems in the finance department, including what she described as violations of the town purchasing policy by then-Town Manager Mark Pearson.

After she reported the issues in February 2012, Roy’s supervisors, including Pearson, “utilized their positions with the town to sabotage the plaintiff in any way possible,” her attorney, Alexander Spadinger of the Saco law firm Smith & Elliott, wrote in the lawsuit filed Feb. 26 in York County Superior Court. Roy left her position as public works department office manager about a year ago.

The Maine Human Rights Commission last May supported an investigator’s findings that Roy was retaliated and discriminated against after she reported her concerns about the finance department. The commission recommended Roy and the town seek conciliation, an agreement that satisfies the concerns of both sides.

The commission issued a notice of failed conciliation 90 days later, clearing the way for Roy to file a lawsuit against the town.

Assistant Town Manager V. Louise Reid said Monday that town officials could not comment on the lawsuit because it is a personnel matter and involves pending litigation.

Pearson’s attorney, John Richardson, said the former town manager had only been on the job for two weeks when he discovered problems and began to reform financial management in the town. “The changes made her unhappy,” Richardson said Monday.

Roy, who started working for the town in 2010, was asked in July 2011 to take on additional duties in the finance department that included processing accounts payable and payroll. She wrote a letter to her supervisor in February 2012 saying she had “grave concerns” about financial irregularities in the finance department. She also resigned her duties in that department, but kept her position at public works.

“She decided she needed to protect herself and the town by removing herself from the situation,” Spadinger told the Maine Human Rights Commission last year. Spadinger could not be reached to comment for this story.

In her memo, Roy said the town’s purchasing policies were being violated, child support payments were not being applied properly through payroll, bills were not being paid on time, the town’s contributions to retirement funds were not being made and Form 1099 tax statements were not issued properly.

After she wrote the memo, Roy said she was threatened with firing or reduced work hours, and was required to use a time clock when others in her department were not.

Glenn Israel, an attorney for the town, told the Maine Human Rights Commission there was no evidence to support Roy’s claim and that the case appeared to be a situation where an employee was having trouble with her boss and decided “the best defense is a good offense.”

The financial issues raised by Roy and later outlined in a report from an auditing firm were part of the ongoing political tension that plagued Old Orchard Beach for the first half of 2013. That tension led to the Town Council firing Pearson in March and a recall election in June that removed six of the seven town councilors from office.

Pearson later filed a lawsuit saying the Town Council violated his contract, the town charter and the state and federal constitutions by voting to terminate his contract without cause. That lawsuit is pending in York County Superior Court.

Gillian Graham can be contacted at 791-6315 or at:

ggraham@pressherald.com

Twitter: grahamgillian