OKLAHOMA CITY — More than 160 employees plan to sue the state over wrongful terminations, forced resignations or early retirements, which they say stemmed from bungled financial oversight at the state Department of Health, the Oklahoma Public Employees Association announced Tuesday.

The 161 employees are seeking a combined $3 million in compensation for mental, emotional and financial damages, according to a notice of claim filed with the state late last month.

In a statement, Sterling Zearley, the association’s executive director, said nearly 200 employees — mostly at the county level — saw their jobs eliminated because the Health Department thought it had a $30 million budget shortfall.

A six-month grand jury probe and a state audit found that the Health Department wasn’t actually short on cash. Instead, it discovered that bungled and inept internal financial oversight and management led to the perceived crisis — and nearly 200 unnecessary layoffs. While the probe found no criminal wrongdoing, top officials warned the state could face wrongful termination lawsuits stemming from the layoffs.

“The premise used by the Health Department was wrong and their actions caused financial, mental and emotional hardship for those employees,” Zearley said. “We’ve tried to work with the Health Department administration to fix this, but they don’t seem interested in correcting it.”

In a statement, the Health Department said it regrets the impact the reduction in force had on its former employees, and has been in discussions with the public employees association and its counsel.

“There are still legal and financial questions that must be carefully reviewed surrounding the reduction in force,” the agency said. "OSDH has also aggressively engaged in recalling classified positions that were vacated during the reduction in force. We feel the strain on our service delivery around the state, primarily in county health departments, from this forced departure and have tried to expedite the recall process within the boundaries of current law."

The agency noted it has rehired 13 employees.

Tom Dunning, a spokesman with the public employee group, said some terminated employees were offered new Health Department jobs, but in different communities than where they once worked. For instance, an Ada resident was offered a job in Altus, he said.

“It’s 161 different stories and variables,” he said of the litigants. “Some people don’t want to go back. Some people would like to go back where they worked.”

Others have moved on to different jobs, Dunning said.

Kimberly Mostrom, of Guthrie, said in a statement that she was seven months pregnant when she was laid off. Her health insurance expired 30 days before the birth of her child, and no one wanted to hire her that close to delivery.

The final days of her pregnancy became “tense with worry,” said the registered nurse. Mostrom used to provide support and education to first-time mothers in an effort to reduce abuse and neglect.

“The emotional and financial stress played a major role in our daily lives,” she said. “We had to make many financial sacrifices to make ends meet. Now we owe thousands of dollars to the hospital. That wouldn’t have occurred if the insurance policy had still been in effect.”

Lana Shaffer, who worked in Northwestern Oklahoma, said the job cuts “riddled county health departments and their ability to provide services.” Of the jobs cut, she said only four were in the central Oklahoma City office.

“Harper and Beaver Counties were both one-nurse counties, and both those nurses were cut,” she said in a statement. “Their cuts were wrong and affected Oklahoma as a whole.”

Stecklein covers the Oklahoma Statehouse for CNHI's newspapers and websites. Reach her at jstecklein@cnhi.com.

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