HSRD Attorneys Represent Former CEO In Lawsuit Against Gateways Hospital, Settlement Reached After Opening Statements

HSRD attorneys Dan Stormer, Shaleen Shanbhag, and David Washington represented Mara Pelsman in a jury trial starting July 22nd before Judge Ruth Ann Kwan in Los Angeles Superior Court.

Ms. Pelsman’s lawsuit alleged that the all-male Board of Directors of Gateways Hospital and Mental Health Center discriminated against her on the basis of her gender and retaliated against her for complaining about the Board’s improper conduct.

In her opening statement, Ms. Shanbhag said, “Having lost her job was the most devastating thing that happened to Ms. Pelsman. All she wanted to do was make sure Gateways operated lawfully.”

Settlement discussions began almost immediately after opening statements and the parties announced that they had reached a settlement on July 25th. The settlement terms included a monetary award, the removal of the termination from Ms. Pelsman’s personnel file and a letter of recommendation thanking her for her 20+ years of service.

Ms. Pelsman was hired as Gateways’ CFO in 1996, was promoted to CEO in 2000 and held that position until she was fired in May 2017. Gateways flourished under her leadership. During her 20 years there, she received not a single negative performance review.

Ms. Pelsman was fired after she voiced multiple complaints to the Board of Directors about what she believed to be unlawful activity by the Board members. Her complaints related in large part to the Board’s failure to comply with Gateways’ governing bylaws, which are required under CA nonprofit law. Compliance with the bylaws is mandatory in order for Gateways to maintain its funding from local, state, and federal agencies, and in order for the hospital to be accredited.

In response to Ms. Pelsman’s initial complaints, the Board decided to reassign the majority of Ms. Pelsman’s CEO duties to her male subordinate, the COO. But the Board’s retaliation did not stop Ms. Pelsman from advocating for Gateways – she raised concerns to the Board eight additional times after that point. The Board continued to retaliate by excluding her from discussions she had a right to participate in, treating her with hostility, placing her on leave, and ultimately firing her. The day after Ms. Pelsman was fired, the Board of Directors promoted the male COO to her position.

Ms. Pelsman insisted on lodging complaints with the Board because she believed the Board’s actions were not only unlawful, but also jeopardized patient care.




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