Faith J. Larsen - Page 5




                                        - 5 -                                         
          Decline in Petitioner’s Employment Relationship With PCI                    
               After retiring, Mr. Hoiland traveled extensively.  While               
          traveling, Mr. Hoiland called petitioner and threatened to fire             
          her if she did not sleep with him when he returned.  Petitioner             
          feared that Mr. Hoiland, a recovering alcoholic, was drinking               
          again, and she attributed his advances to a relapse.  Petitioner            
          called the personnel manager for PCI, who encouraged her to                 
          prepare and file a summary of her conversation with Mr. Hoiland.            
          Mr. Hoiland apologized to petitioner when he returned from his              
          vacation and explained that he had, indeed, been drinking.                  
               Petitioner’s relationship with Mr. Hoiland and PCI                     
          deteriorated rapidly after this exchange with Mr. Hoiland.  Mr.             
          Hoiland fired petitioner in September 2001.  Petitioner                     
          informally asserted a claim against PCI for damages after PCI               
          terminated her employment.  Petitioner and PCI engaged in                   
          mediation to settle the claim.  Petitioner, through her counsel,            
          alleged that the $160,000 payment was a bonus during mediation.             
          The mediation resulted in petitioner’s receiving a $100,000                 
          settlement, of which $25,000 was allocated to back wages and                
          $75,000 to general damages, attorney’s fees, and costs.                     
          Petitioner and PCI also waived all other claims against one                 
          another as part of their mediation agreement.  The tax treatment            
          of the mediation settlement is not in dispute.                              








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