October 11, 1996 in City

Lawsuit Over Firing Takes Courtroom Down Steamy Path

By The Spokesman-Review
 

Attorneys on opposite sides of a lawsuit against a Spokane Valley mining magnate took turns Thursday portraying life inside the company as either Sin City or Divorce Court.

What happened inside Neal A. Degerstrom’s office building from 1990 to 1994 is the key issue for a Spokane County Superior Court jury hearing a wrongful-termination lawsuit.

Matthew Failing filed the suit after losing his safety worker’s job in 1994. He contends he was penalized for raising complaints about unsavory activities taking place after-hours in the firm’s basement.

“I was told those are things that go on there because it was Neal’s company,” Failing testified. “I was told to not rock the boat.”

Attorneys for Degerstrom, 72, acknowledge he took thousands of pictures of naked and semiclothed women in the basement.

They insist Degerstrom’s photography, a hobby for at least 20 years, was legal and had no impact on company morale or workplace attitudes.

The lawyers contend that Failing, 36, lost his job because he turned hostile toward co-workers during a divorce and child-custody battle.

His wife worked at the firm at the time. She also modeled for Degerstrom for years before joining the company.

Failing is seeking damages for the loss of his job, emotional distress and future lost earnings.

His attorney, Greg Staeheli, had Failing testify Thursday that pictures taken in the company basement showed many women in poses befitting X-rated magazines.

Failing said he or his wife received three packets of photographs from unknown senders - photographs that included pictures of women who worked at N.A. Degerstrom Inc.

Many of the photographs showed women sprawled on animal skins or against a shower stall. One showed a naked woman seated on a pool table.

Failing said he learned from several workers about the photo sessions - in which Degerstrom paid $100 to each model - before he was fired.

His job included being a contact for employees who felt victimized by sexual harassment.

Failing said the basement activities were not challenged by other workers, but female workers who posed for Degerstrom received preferential treatment at the mining and construction firm.

Degerstrom’s attorneys said nothing during most of Failing’s graphic descriptions of the photographs.

Judge Paul Bastine has ruled the pictures cannot be used as evidence unless defense attorneys challenge the accuracy of statements about their content.

Bastine has ordered the photographs locked in the offices of Degerstrom’s attorneys, Bob Dunn and Keller Allen. After the trial, they’ll be returned to Degerstrom.

During cross-examination, Failing admitted he never documented the problems that supposedly led to his firing. He said supervisors didn’t want written complaints.

“I was told to present them orally,” he said.

The trial is expected to conclude today, but Bastine has told jurors they won’t start deliberations until Monday.

, DataTimes


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