San Francisco should honor the more than $500,000 settlement agreement that a former city manager allegedly forged and offered to a Black transit worker in exchange for dropping a racial discrimination lawsuit, attorneys representing the worker said Tuesday.

The transit worker, identified for the first time as Kathy Broussard, sued last August alleging the San Francisco Municipal Transportation Agency passed her over for promotion in retaliation for filing complaints against a former director.

Broussard began reporting the director in early 2014 for allegedly calling her the n-word, making inappropriate sexual advances and telling her that complaining to the Equal Opportunity Office was one of the “seven deadly sins.”

She is one of a number of Black city workers who have alleged that the Department of Human Resources did not treat their complaints seriously and left them waiting for answers.

Fast forward to Aug. 31 and Broussard dismissed her lawsuit after reaching an agreement with a Department of Human Resources EEO manager, Rebecca Sherman, who resigned earlier this month and allegedly admitted to the forgery.

DHR Director Micki Callahan and City Attorney Dennis Herrera have since called that deal a fraud. However, attorneys for Broussard now argue that Sherman had the authority to negotiate it in her role at EEO.

“The bottom line is that if the Department of Human Resources is too corrupt or too incompetent to handle investigations and if they leave it up to someone who had the apparent authority to enter into the settlement agreement, whose problem is that?” said Karl Olson, who is representing Broussard alongside attorney Therese Cannata. “It’s The City’s problem, it’s not our client’s problem.”

A spokesperson for Herrera, John Cote, said the office is willing to have the lawsuit reinstated.

“To protect the privacy of the affected employee, we are not going to identify the case at this time,” Cote said. “In the matter involving Ms. Sherman, we informed the employee that we are willing to file a stipulation requesting to reinstate the employee’s lawsuit. We are also conducting a thorough investigation at the request of the Department of Human Resources.”

“Ms. Sherman did not have the authority to enter into a settlement agreement,” Cote added in a statement sent Wednesday. “The City could not legally settle this lawsuit without recommendation by the City Attorney and approval by the SFMTA Board of Directors. In fact, even this forged document says that it is contingent on SFMTA Board approval, which of course didn’t happen and wouldn’t happen with any kind of forgery.”

Olson said Broussard had a “long history” of dealing with Sherman in “good faith.”

Sherman was assigned to investigate a retaliation complaint Broussard filed against the director, Chris Grabarkiewctz, in December 2018, according to the lawsuit.

Broussard was acting Proof of Payment manager from 2013 until 2015 but was passed over for a formal promotion to the role and reduced to a fare inspector supervisor after filing earlier complaints against Grabarkiewctz.

Broussard waited “tirelessly” to hear back until Sherman allegedly told her in May 2019 that the retaliation was determined to have occurred.

But those findings do not appear to have been finalized by the time she filed the lawsuit in August 2019.

Callahan revealed the allegations against Sherman in an explosive email to city leaders Sept. 18 that did not identify Broussard by name.

In the email, she accused Sherman of misleading Broussard and falsely promising her a promotion. Callahan blamed the situations on the actions of a “rogue employee.”

But Olson and Cannata pushed back, saying that Sherman worked under Callahan and EEO Director Linda Simon.

“The buck stops with Micki Callahan,” Olson said.

While Broussard’s attorneys argue Sherman had the authority to negotiate the settlement, forging the signatures of SFMTA Director Jeffrey Tumlin and two deputy city attorneys is a different question.

In a redacted letter to Broussard obtained by the San Francisco Examiner, Herrera said the signatures were forged and that his office had not approved any settlement in the matter.

Sherman is also accused of forging emails and text messages pretending to be a department payroll director.

The District Attorney’s Office plans to investigate and DHR is auditing all cases handled by Sherman.

Sherman has not responded to a request for comment.

Attempts to reach Grabarkiewctz by phone and email were not successful. A spokesperson for the SFMTA confirmed he is no longer employed by the agency.

While Broussard may not receive $500,000, Olson said she was given a promotion to manager after the scandal broke.

“Mr. Tumlin has told Ms. Broussard that she is a highly valued employee and they want to make it right,” Olson said.

mbarba@sfexaminer.com

This story has been updated to include an additional statement from the City Attorney’s Office.