|By Christian Giggenbach, The
Register-Herald, Beckley, W.Va.McClatchy-Tribune Regional News
Mar. 22, 2008 - LEWISBURG -- The former president of The Greenbrier filed a $50 million lawsuit Friday against railroad giant CSX Corp. -- the resort's parent company -- alleging he was fired by CSX President Michael J. Ward for uncovering and trying to stop the "unethical" and unaccounted for practices of "fringe benefits" by "current and retired CSX executives," which included "free medical examinations at the resort's clinic, free rooms and meals, excessive discounts from the food and beverage outlets and greatly discounted merchandise from (retail) shops."
Paul Ratchford, who headed the world-famous resort for less than a year in 2006 and 2007 and oversaw a $50 million renovation project, also named CSX Hotels Inc., a West Virginia corporation, Bruce Rosenberger, Howard Shapiro and Ward, and the Georgia-based company Head Coach Inc. as co-defendants in the lawsuit. Ratchford is being represented by Lewisburg lawyer Barry Bruce.
Neither Bruce nor Ratchford could be reached for comment Friday.
CSX spokesman Gary Sease told The Register-Herald Friday that "the allegations are without merit and the company will defend its position vigorously in court."
Ratchford also alleges past and present CSX officials were benefiting from the luxurious lifestyle offered by The Greenbrier, despite the fact the resort was losing "approximately $15 million per year."
In all, the 15-page lawsuit charges the defendants with seven separate counts of wrongdoing, including fraud, breach of contract, wrongful discharge, violation of California labor laws, intentional infliction of emotional distress and violation of the West Virginia wage and payment act.
The lawsuit stated that on Sept. 18 of last year, "Michael Ward, chief executive officer of CSX Corp., without cause or explanation and within a 45-second conversation, terminated the plaintiff's employment."
A brief news release issued at the time by The Greenbrier said Ratchford had left the resort to "pursue other interests."
The suit chronicles the attempts by CSX officials to woo Ratchford away from his previous job as general manager of the Ritz Carlton at Half Moon Bay, Calif., just outside San Francisco.
The top spot became available when Ted Kleisner retired in October 2006 after nearly 25 years with the resort. Within months, Kleisner had a new job running Hershey Entertainment and Resorts in Pennsylvania.
The lawsuit states Ratchford initially turned down CSX's offers because of "the impact it would have on" his family and the subsequent move to the East Coast.
After he initially declined the job, Kleisner and Rosenberger, a Greenbrier executive, told Ratchford "that if desired, he could keep that position (president) for the rest of his career," according to the suit.
Rosenberg, of Lewisburg, declined comment when reached at his home Friday evening.
In September 2006, "based upon further assurances given by CSX and/or CSX Corp.," Ratchford accepted the position of president of the resort. The contract Ratchford signed with CSX was attached to the lawsuit and indicated an "annual base salary of $350,000 per year," plus signing bonuses and incentive pay. Ratchford also bought a multimillion-dollar home at the Greenbrier Sporting Club, the suit said.
"At the time ... The Greenbrier was experiencing a financial loss of approximately $15 million per year and was reduced to a four-star-rated resort from its prior five-star rating in the resort industry," the suit said.
The suit said Ratchford was hired by Ward to accomplish three goals -- make the resort profitable, win back the fifth star and attract younger guests, or "GenXers."
Ratchford reiterated those goals in several high-profile speeches he gave throughout the county during his tenure.
Ratchford claims all of the alleged freebies by CSX executives were kept on "city ledger accounts, all of which were not paid or paid at a fraction of the cost," and were kept hidden from any possible taxes.
"None of such benefits were being attributed as income to said executives, all in contravention (violation) of West Virginia tax laws," the suit said. "Executives ... were receiving an enormous amount of free benefits for themselves, their families and their friends, all at a great expense to The Greenbrier."
Ratchford also alleges:
- Ward approved his actions, which "stopped unethical and possibly illegal conduct at The Greenbrier."
- He received "positive feedback" from Shapiro and CSX officials during job performance review meetings.
- CSX executives received "free meals and excessive discounts" from the food and beverage department.
- Executives of CSX were receiving "free medical/physical examinations from The Greenbrier Clinic," in exchange for "said business not having to pay fair market rent."
- Kleisner and Rosenberger "intentionally and fraudulently" misrepresented claims in order to induce him to take the job.
- He had full intentions of staying at the resort for the rest of his working career and suffered a "career death sentence in the resort industry" because of the defendant's actions.
The lawsuit said Ratchford was "discharged because of his insistence on correcting the irregularities of fringe benefits to executives and members."
Ratchford also claims he has "come under a psychologist's care" and has been diagnosed with "post traumatic stress disorder," and because of the defendant's actions has been "stigmatized and may never regain the stature he had in the hotel resort industry."
Ratchford is asking the court for $50 million, plus any punitive damages that may be awarded by a jury.
"CSX's actions ... were willful, wanton, reckless and fraudulent," the suit said. " ... the plaintiff is entitled to punitive damages to deter (CSX) from engaging in this kind of conduct in the future."
The lawsuit also indicated CSX gave Ratchford $700,000 in severance pay after his departure last year.
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