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A Legal Circus

The board of CircEsteem sacks, then sues, the founder.


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At first glance, the letter from CircEsteem looked like a bad joke. "Greetings!" it read. "After much deliberation and due diligence, the Board of Directors of CircEsteem has terminated Paul Miller's employment as of June 22, 2009."

Founded seven years ago to build mutual respect and confidence in kids through circus training, CircEsteem is Miller's baby. Born of his experience as a Ringling Bros. clown, it has grown into an educational force that reaches thousands of kids annually from all kinds of neighborhoods in and around Chicago. On a reported annual budget of about $600,000, CircEsteem runs a youth circus, an after-school tutoring program, a summer camp, and a youth employment program.

But the letter, signed by board president Jo Ann Potashnick, was no joke. It didn't offer an explanation for Miller's sacking, but a seven-count federal lawsuit the board filed against him the day after he was fired does. The list of allegations includes trademark infringement, cyberpiracy, breach of duty, and misappropriation of trade secrets.

According to the complaint, Miller started offering workshops under the CircEsteem name in 2001, and the next year formed a for-profit corporation called Pro Clown Productions, which developed programs for CircEsteem. Pro Clown allegedly covered the expenses for the after-school classes CircEsteem eventually offered, and also received any profits from those classes. Miller also registered Internet domain names for CircEsteem, and incorporated it as a nonprofit (with himself as CEO and "Chief Goof Officer"). CircEsteem's name was trademarked, and over the next few years the organization thrived as its programs expanded.

But, the complaint goes on, Miller "became increasingly frustrated by the fact that he had to work under the direction of and in accordance with the decisions and plans of the Board of Directors." He was "entrepreneurial," and "believed that he was entitled to unreasonably high income from CircEsteem's operations." Although he was on salary, Miller paid himself an additional $125 per hour when he performed with the group and "sought additional income" in the form of fund-raising commissions and program "residuals." Finally, according to the suit, in March 2008 he "conceded that CircEsteem had 'grown beyond [his] managing capabilities,'" stepped down as CEO, and moved to Kentucky while retaining a staff position at "a substantial annual salary." The board also agreed, at about this time, to pay Miller a $280,000 "royalty fee" for Pro Clown's after-school business.

In October 2008, CircEsteem appointed Richard Friedman as its new executive director. He and a majority of the board resigned four months later when CircEsteem hit a financial crisis, and Rick George became acting executive director April 1. The board, five of whose six members were newcomers this spring, claims Miller's duties during and after Friedman's tenure were primarily limited to fund-raising, but that he persisted in "unauthorized interference in daily management"—among other things, spreading false information about CircEsteem and registering a confusingly similar domain name: While Miller claimed to be "working to help save the organization," the complaint says, he was "simultaneously engaged in an illicit, improper and illegal course of conduct" that included trying to hire away CircEsteem staff for "competing performance opportunities" and offering to help them organize for better wages.

The suit also charges that on the day he was terminated, Miller hijacked CircEsteem's phone number, Web site, and e-mail, instructed the Web host to shut down the site, and redirected all phone and e-mail communication to himself. According to the complaint: "Telephone calls to CircEsteem on its principal corporate number . . . are all going to Miller and not to CircEsteem. In addition, Miller is using the number as the contact number on the Web site for his professional persona, Pauly the Clown."

On June 23, CircEsteem was granted a temporary restraining order that instructed Miller to "refrain from conducting any business on behalf of CircEsteem" and to relinquish the e-mail addresses, Web site, and phone numbers.

On July 6, Miller said he couldn't address the specifics of the case. "I will be filing a response to their suit," he said. "I don't know whether I'll sue or I won't sue—it's hard for me to decide. I attempted to settle with the current board of CircEsteem, and that was rejected earlier today."

Trudi Langendorf, a longtime CircEsteem board member who was among those who quit earlier this year, says the current board is missing the point of this "really complicated" story, which is that "Paul has consistently done stunning work with those kids—stayed with them and transformed their lives." A status hearing was scheduled for July 8.

If the Job Fits

Things have also been a little bumpy at Lincoln Park's Peggy Notebaert Nature Museum. Laurene von Klan, who'd been CEO for three years, was let go last December when the organization found itself in a cash crunch. Board member Donna Gustafsson, who'd been serving as board-to-staff liaison, stepped in as interim head, and a five-month national search for a replacement ensued. In May the board touted a successful conclusion to the search. Marie Trzupek Lynch, executive vice president of human services for the YMCA of Metropolitan Chicago, would take over June 1. In an official statement, board chair Charles Douglas said, "The Board is confident that she will chart the course for the continued expansion of the Museum and its programs."

But in mid-June, after just a couple weeks on the job, Lynch turned in her resignation, citing "a difference in strategic vision" for the organization. It's hard to see how a gap like that could get overlooked in a five-month search and interview process, but Gustafsson immediately stepped in again, and at last week's board meeting she was officially appointed to the job, with a commitment to stay for at least the next year.

Lynch, who gave up her YMCA spot to take the Notebaert position, is now jobless in a tough market. She says she'll spend time with her kids and maintains that she has "fond feelings for the museum." Gustafsson—who has a background in international corporate finance and marketing—says she's ready to seize the moment "to raise our institution to the next level."

Launched as the Chicago Academy of Science in 1857, the Notebaert has had a long-standing identity problem that can be blamed on living in the shadow of the Field Museum. But, in spite of cutbacks last year, it chalked up attendance of more than 300,000 (much of that in school groups), has a newly expanded 45-member board, a growing partnership with Green City Market, and a budget for the new fiscal year of $7 million. Gustafsson says the goal is to be the "premier resource for nature and science education, with a focus on the environment and conservation."

"It's our time," she declares: "We're on the cusp of a game-changing environment where our mission—what we've been doing for 150 years—can really take off." Maybe the strongest candidate was already in place when the CEO search began.   v

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