Newberg School District to pay $135,000 to settle former superintendents lawsuit

The Newberg School District Board of Directors approved a settlement March 11 resolving a $2,500,000 lawsuit brought by former superintendent Dr. Steven Phillips, the board announced at the meeting.

Board members voted unanimously to approve a March 3 settlement agreement under which the district will pay $135,000 and the district's insurer, PACE, will contribute $15,000 and cover attorneys' fees. The board read a prepared statement saying it still considers the termination of Dr. Phillips justified based on investigator findings but that settling is the most fiscally responsible option to avoid prolonged litigation costs.

The settlement was introduced as an agenda addition after the meeting returned from executive session under Oregon statute ORS 192.660(2)(h) (consultation with counsel regarding current or likely litigation). The board statement explained the calculus in financial terms: avoiding the uncertainty and expense of a court trial and preserving district resources for students, staff and programs.

The motion to approve the settlement was made and seconded on the record; the roll call was recorded as unanimous. The board also authorized the chair to sign the release recommended by legal counsel.

The settlement does not change the board's stated finding about the reasons for Dr. Phillips' termination: the statement read at the meeting reiterated that the district believes the termination was justified by "clear and substantial concerns about his leadership and adherence to board policies." The district also said PACE had covered the attorneys' fees the district would otherwise have borne.

Why this matters: a settlement reduces uncertainty and immediate legal expense but involves a direct cash payout from district funds. Board members framed the vote as a fiscal decision to avoid protracted litigation costs and to allow the district to focus on operations and student services.

The board took the settlement vote as a formal action during open session after returning from executive session. No additional details of the settlement terms (for example, nondisparagement clauses or other contract language) were read into the record at the meeting.

Ending: The board moved on to the consent agenda, and later to routine business. The district recorded the settlement approval and the authorization for the chair to sign the release as the official board action on March 11.