Employment Suit Embroils MALDEF in Controversy

The fired head of the Mexican American Legal Defense and Educational Fund, Antonia Hernandez, has been accused of mishandling a major job-discrimination lawsuit in Texas as the battle for control of the nation’s leading Latino rights group escalates.

Critics of Hernandez, 38, who was fired last month by the MALDEF executive committee, allege the Texas lawsuit was mishandled largely because of her friendship with Los Angeles attorney Vilma Martinez, a former head of MALDEF and an opposing counsel in the Texas case.

Some critics charge Hernandez and Martinez with conflicts of interest in the class-action suit against H. E. Butt Grocery Co., a chain of 155 stores in south Texas. In the suit, three former Butt employees, all Latinos, charged Butt with discriminatory hiring and promotion practices against Latinos. They also sought back pay and job reinstatement.

The case has become an issue among Latino rights activists in San Antonio because MALDEF and Martinez received legal fees of $150,000 and $32,000, respectively, while the three ex-employees were each offered an $8,000 settlement, which they think is inadequate.

“There is concern because a group that is supposed to be helping the disadvantaged turns around and helps itself,” a Latino leader in San Antonio said.

The accusation that Hernandez mishandled the Butt case was raised in a Jan. 26 letter from MALDEF board Chairman Eric P. Serna to the board. He wrote of the plight of the plaintiffs--one had lost his home, another faced foreclosure--and accused Hernandez of allowing the case to be botched.

Serna said the case was an example of Hernandez’s poor leadership skills and her inability to follow the executive board’s wishes.

“In a nutshell, Ms. Hernandez simply had ill served MALDEF,” Serna wrote.

Serna cited what he said was a possible conflict of interest: Had MALDEF’s lawyers fully represented the named plaintiffs’ interests by settling the class action over the plaintiffs’ objections when it may have damaged the chances of their individual claims?

Although the grocery chain agreed to set up a $250,000 scholarship fund and an affirmative action program, MALDEF’s handling of the case also has been criticized because its attorneys did not press for back pay or job reinstatement as part of the class-action settlement.

Hernandez and Martinez have both declined to discuss the case. However, Martinez, who is a member of the UC Board of Regents, wrote a letter to MALDEF’s directors saying she was outraged by the charges.

“After legal research confirmed that my representation would not be improper, and given that I have practiced in this area of the law throughout my entire legal career, I agreed to act for (Butt),” Martinez wrote.

The alleged mishandling of the Butt case is the main reason Hernandez was fired after 17 months as MALDEF president and general counsel, several members of the group’s executive committee said. Serna has refused to say why she was fired.

Other MALDEF sources said it was several disagreements, including a dispute over a letter Hernandez wrote endorsing the sale of Los Angeles television station KMEX and nine other Spanish-language stations to non-Latinos, that led to her dismissal.

Hernandez is challenging the authority of the 15-member executive committee to fire her, arguing that only MALDEF’s 34-member board of directors has that authority. A special board meeting has been set for Feb. 28 to resolve the matter.

The Butt case, filed in San Antonio federal court in 1984, was considered important for Texas Latinos, who accused the chain of indiscriminately demoting and firing Latino employees. One of the named plaintiffs, Richard Arzola, 33, said he was demoted for no apparent reason after two weeks as an acting store manager.

Arzola said he felt good about the case in October, 1984, when MALDEF attorneys proposed job reinstatement and back pay settlements ranging from $95,000 for himself to $31,000 for another plaintiff, Paul Hernandez.

Problems set in, however, when Arzola and the two other named plaintiffs learned that Martinez, who had left MALDEF two years earlier, had been retained by Butt as a consultant to assist in the defense against the suit.

“I didn’t feel good about it,” he said. “But the MALDEF attorneys told us not to worry about it.”

Arzola said he opposed the class-action settlement offered by Butt because he and the other named plaintiffs--his brother Jose and Paul Hernandez--wanted their cases settled before the class issues were decided.

Arzola wrote to MALDEF’s executive board, expressing his dissatisfaction with MALDEF’s lawyers, and his letter has become part of the controversy. Serna and others have charged that Hernandez did not bring it to the executive board’s attention. She has denied their claim.

Arzola also complained to Latino groups in San Antonio, including the League of United Latin American Citizens (LULAC). But Norma Cantu, who runs MALDEF’s San Antonio office, argued at a LULAC meeting that the proposed settlement could be lost if the chain was pushed on the individual damages.

(Cantu and MALDEF attorney Jose (Beto) Juarez, who was MALDEF’s lead attorney in the case, did not respond to several telephone requests for interviews.)

One MALDEF board member, Frank Quevedo of Buena Park, said many of Arzola’s complaints are unjustified. “I’m not persuaded by the facts that MALDEF did anything wrong,” he said.

San Antonio federal Judge Hippo Garcia approved the proposed class-action settlement last March, and left individual cases pending.

The plaintiffs clashed again with the MALDEF attorneys after the judge’s ruling. They wanted a larger cash settlement than MALDEF attorneys were willing to support. Eventually, an offer of $24,000, or $8,000 each, was made by Butt attorneys. The offer is still pending.

Several lawyers in San Antonio, who are familiar with the case, questioned why MALDEF did not try to disqualify Martinez because of her past ties to the organization, for whom she remains an active fund-raiser.

But other lawyers said Martinez should be free to take any case she wants to.

Apprised of the facts and controversy surrounding the case, Associate Prof. Erwin Chemerinsky at the USC School of Law said that in his view, Martinez was free to represent Butt as long as she was not a MALDEF official and did not use any information gathered during her association with MALDEF on the case.

“She has a right to work for the other side,” said Chemerinsky, who teaches courses on professional responsibility.

The plaintiffs’ new attorneys, Steve Angel of Oklahoma City and Edward Pina of San Antonio, say they are troubled because the class settlement contained no job reinstatement or back pay. “I think their cases are worth a lot more than what’s been offered,” Pina said.

On the other hand, Los Angeles lawyer A. Thomas Hunt, who has handled 40 class-action suits, including successful settlements against the Los Angeles Police Department and Alpha Beta supermarkets, said the lawyer should have the final say.

“It has to be understood that (the laywer) calls the shots because (the lawyer) represents the class as a whole,” Hunt said. “Ethics require me to do what is in the best interests for the class.”

Chemerinsky is not so sure that the role of the plaintiffs’ attorney is clear-cut.

“It’s difficult to say who is in the best position to make the decision for the class,” he said. “Can an attorney agree to a settlement without the concurrence of the named plaintiffs, who are part of the class? Who is really the client?”