Judge Upholds Defamation Award Against Pacifica Foundation

Pacifica Foundation, the owner of five progressive, listener-supported radio stations, lost its bid to vacate a $300,000 arbitration award to a former interim executive director who was fired in 2019 after he had fallen out with the nonprofit's board over his handling of financially troubled WBAI in New York City.

Courthouse News Service reports U.S. District Judge Stephen Wilson in Los Angeles on Friday confirmed the arbitrator's decision to award John Vernile damages for defamation even though the arbitrator had agreed with Pacifica that he wasn't wrongfully terminated. Earlier this week, the judge had denied Pacifica's motion to throw out the award, rejecting the nonprofit's argument that the arbitrator had exceeded her power because some the purported defamation occurred after Vernile was fired and none of it "arose" from his employment.

Arthur Schwartz, a lawyer representing Pacifica Foundation, said that the arbitrator's ruling was an affront to free speech and that the nonprofit will appeal the judge's ruling.

John Vernile

"We are in the somewhat absurd position where an arbitrator rules that Mr. Vernile was lawfully fired for his misconduct, that there was no 'whistleblower' retaliation, that he had improperly acted with the consent of only a minority of our board to close a station in New York City and fire its employees, but that after he was fired he was defamed because someone on the radio called him a 'coupster' acting 'with a rogue faction of the board,'" Schwartz said in an email.

Although Pacifica Foundation is absolutely within their right to appeal Wilson's ruling, it's unlikely to succeed and would have to post a $450,000 bond to stay enforcement of the judgment, said Stephen Jaffe, Vernile's attorney.

"Judge Wilson followed the law and came down with the correct decision," Jaffe said Monday in a telephone interview. "The only reasons to overturn the arbitrator's award would have been if she had a conflict of interest or ignored the underlying law."

The conflict that cost Vernile his job centered around WBAI, the original home of the Democracy Now! radio show that focuses on activism and social justice issues. According to court filings, Vernile, who was hired in July 2019, was confronted with a host of dire financial and compliance problems at the radio station. In October of that year, he shut down local programming at WBAI and sent the Brooklyn-based station's staff home.

Vernile's actions caused an uproar and WBAI went to court to stop them. The nonprofit's board, comprised among others of representatives of all five stations, voted to terminate his employment the following month.

Meanwhile, according to the arbitrator's findings, supporters of WBAI had held a rally in support of local programming and in opposition to the shutdown where many prominent New Yorkers appeared.