At last night’s Fort Worth school board meeting, Aracely Chavez, the former financial department employee who blew the whistle on the failed Tyler Industries payroll computer program that overpaid 2,000 employees (some long gone from the district) more than $1.5 million in 2009 and got canned for it, settled her three-year-old whistle-blower lawsuit against the district for an undisclosed sum, including lawyer’s fees.

The district’s legal head, Bertha Whatley, told Fort Worth Weekly she would release the settlement agreement to this paper in two weeks.

Along with the financial settlement, Chavez will be reinstated as a district employee at or near her old salary that was around $90,000. Her job description is yet unknown.  In 2007, Chavez was a financial expert with the district who, along with a few other hand-picked employees, was given an assignment within a specially-created sub-division set up by then superintendent Melody Johnson to make sure the new multi-million dollar payroll system purchased from Tyler that year was seamlessly implemented. (Tyler also sold Johnson another doomed software program, Connects. The district paid more than $6 million for the two. Connects is currently being phased out.)

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The payroll transistion process was slow due to the complexities of the old system being woven into the complexities of the new program and by the end of 2008, Johnson, then-president Ray Dickerson and then-trustee Chris Hatch, all were pushing the department to get it up and running by the beginning of 2009. For several months, Chavez had been warning Johnson and then financial director Ron White that the system was not ready. She told them that much of the data already implemented was incorrect, outdated and had not been transferred properly. Implementing it before the kinks were worked out, she said, would be “disastrous.”

An internal audit would later prove her to be correct. It concluded that the system was rushed into production before it was ready and that much of the data was compromised causing paychecks to be sent to hundreds of employees who had left the district years before and overpaying a “sampling” of 2,000 by $1.5 million. Several trustees called for total forensic audit, believing that much more money would be found to be lost if the entire employee base were audited. The board majoirity refused to spend the money.

In any event, by then it was too late for Chavez and the other members of the newly created sub-department. Soon after their  concerns were raised about the systems shortcomings, they were told that Johnson was eliminating their department. Their jobs were lost. They could reapply if other positions were available, they were told. But for Chavez there was none. She was let go. She and two others sued. Her coworkers settled last year for around $50,000 each. She continued her fight.

Now, after three years and unknown thousands of dollars in lawyer’s fees paid to outside attorneys to fight her, the district is taking her back, putting her back on the payroll, paying her lawyer and making her a cash settlement to boot. How much the final costs to the taxpayers for fighting Chavez, whose warnings were proven correct early in 2010 following the internal audit, are still unknown. The Weekly has put in a request for information to the district for the total costs, including her settlement and the outside lawyer’s fees. One thing is certain, the costs would have been far less if Chavez had been reinstated early on or, even better, never fired in the first place.

Chavez, who is a politcally active Latina whose friends and colleagues say the district from the git-go underestimated her determination for vindication and to be made whole, could not be reached for comment. Earlier she told the Weekly that she would settle for no less than what it appears she now has gotten.

And waiting in the wings is the case of whistleblower Joe Palazzolo, the Arlington Heights High School assistant principal who was fired in 2010 after reporting serious incidents of malfeaseance at the school that had been ongong for several years, including attendance fraud, a state felony, and sexual harassment, misuse of booster club funds and disparate treatment of minority students, all federal crimes. Like Chavez, most of the Palazzolo allegations were proven true by an internal investigation (including the attendance fraud that allowed 21 students to graduate who were not qualified due to serial truancies.) But the only person to be fired turned out to be the whistleblower — who was never charged with any of the illegal activities he reported.  Yet those reponsible for the illegalities were all allowed to resign. None have been charged.  Palazzolo now has a whistleblower lawsuit pending in a state district court.  The costs to fight him are nearing half a million dollars and counting. Jason Smith is the attorney for both Chavez and Palazzolo. He is with the law firm of Art Brender who has a consistently high track record of winning wrongful discharge and whistleblower cases brought by public employees.

Here’s a thought. Instead of fighting school whistleblowers who are trying to save money for the district or reporting grievous wrongdoings, how about rewarding them for doing their jobs by holding them up as examples to the students of good citizenship and committment. It could be a civics lesson students might never forget. Not to mention the gratitude of taxpapers.


  1. Congratulation to Aracely. Now it is time for the board to hold another hearing of the Palazzolo case to settle and rehire Joe. It is foolish for trustees and administrators to continue to deny they fired Palazzolo at the February board meeting with mounting legalfees. It is time for Judy Needham to recuse herself. Betty is correct. Joe and Aracely are to be commended for their determination to see the culture of reprisal ended for employees and students at FWISD. Authoritarian rule no longer serves this school district. Hold a hearing, reinstate him, and get to mediation in good faith.