Former Va. ABC employee sues authority, claiming retaliatory termination

A former Virginia Alcoholic Beverage Control Authority employee has filed a federal lawsuit against the state authority, alleging his termination last year was in retaliation for reporting alleged harassment and discrimination due to his sexual orientation. 

Paul Watson, a former ABC senior business analyst who identifies as gay, claims in the lawsuit he was “targeted” by his former supervisors after he began leading an LGBT+ employee resource group, according to a complaint filed Feb. 6 in the U.S. District Court for the Eastern District of Virginia. 

“I was just trying to do my job and do what I thought they asked me to do, and then to turn around and be fired, … it really hurt a lot,” Watson told Virginia Business in an interview. 

A Chesterfield County resident, Watson seeks $8 million in damages and reinstatement in his former position at the state authority overseeing liquor licensing and sales. He was dismissed from his job in September 2024, according to his lawsuit.

Virginia ABC CEO Dale Farino is named as the sole defendant in the lawsuit. He was appointed as the authority’s head in April 2024, after having served as vice chair of the ABC Board of Directors. A spokesperson for the ABC said it had no comment on the lawsuit.

Watson’s complaint details a series of alleged events starting in June 2023, nearly a month after he was hired. At the direction of Elizabeth Chu, Virginia ABC’s former chief transformation officer, one of Watson’s supervisors — Michael Berman, ABC director of analytics — asked Watson to organize an employee resource group for LGBT+ employees. Watson complied, and the group was named Blended Spirits and had around 20 employees among its members.  

However, in August 2023, Hannah Ragnauth, a licensing manager, complained that Watson was spending too much time in her department speaking about the group, according to the lawsuit. On Oct. 17, 2023, Watson’s other supervisor, analytics manager Gregory Ackerman, issued Watson a written warning echoing similar concerns, stating that ABC’s Bureau of Law Enforcement reviewed security footage showing Watson’s “excessive talking.” However, the lawsuit claims that a human resources review later found no evidence of such behavior.

On Jan. 8, 2024, Ackerman and Berman removed Watson as the head of Blended Spirits and prohibited him from participating in the group due to claims of “excessive” time spent on the group and an inability to reach him the week before, the lawsuit says. Additionally, Watson’s telework privileges were revoked, according to the complaint.

Watson subsequently emailed HR Director John Singleton and Employee Relations Manager Vicky Gay, detailing his allegations of discrimination and false claims made by his supervisors. Singleton allegedly dismissed Watson’s complaint as “not valid,” prompting what Watson’s complaint calls “micromanagement and open hostility” from Ackerman and Berman.

In one alleged incident on Jan. 31, 2024, the lawsuit claims Berman confronted Watson in an open cubicle area, yelling at him and lunging with a clenched fist as if to hit him. 

On Feb. 21, 2024, Watson received a notice of pending disciplinary action from Ackerman and Berman, which said Watson’s employment was in jeopardy because he spent excessive time on the employee resource group, made false statements about leadership, and had lower work production than his colleagues, the complaint says.

In the weeks and months following the notice, Watson alleges his supervisors gave him unrealistic deadlines for reports and arbitrarily changed their expectations in order to document a “false narrative” that he was performing poorly at his job in order to justify his termination from the ABC. 

Watson filed a charge of discrimination with the Equal Employment Opportunity Commission on Feb. 27, 2024, but mediation efforts failed to resolve the conflict by the May 28, 2024, deadline. 

On June 6, 2024, Watson submitted a formal complaint to the Virginia attorney general’s civil rights division and the Virginia Department of Human Resources Management. Later that day, he was placed on a performance improvement plan.

On Sept. 19, 2024, Ackerman and Berman issued Watson a second notice of pending disciplinary action, and terminated his employment the following day, according to the lawsuit. The notice said that although Watson’s performance improved after he was put on the plan, it nonetheless remained “deficient.” 

Watson claims in the lawsuit that he was not aware that Ackerman and Singleton expected to meet with him to discuss his written response to his termination, and that his absence was deemed “job abandonment.” However, the complaint argues that “this decision was reached as a pretext to avoid the legal liability for terminating Watson’s employment, and also to deprive him of unemployment benefits.”

The Virginia Employment Commission later rejected ABC’s job abandonment claim and awarded Watson full unemployment benefits, the lawsuit says. Further, the lawsuit says that three out of five charter members of the employee resource group were terminated by the Virginia ABC. 

When asked about Watson’s claims and the current status of the LGBT+ employee resource group, Virginia ABC spokesperson Pat Kane stated, “Virginia ABC does not comment on potential litigation.”

Watson’s claims of retaliation and a hostile work environment perpetrated by ABC leadership echo similar concerns in lawsuits filed by two former ABC employees last year, who alleged they were fired in retaliation after reporting “millions of dollars” of missing liquor inventory to state leaders. 

Watson, who is represented by attorney Scott G. Crowley of Glen Allen-based Crowley & Crowley, said in an interview that he thinks ABC’s independence as an authority — a 2018 shift from a state department to a semi-independent authority — has led to a lack of oversight among leadership.

“They made me feel like I was being reduced to just being LGBT instead of everything else that encompasses who I am — the skills and the experiences that I can bring to the table as an analyst,” Watson said. 

Watson is seeking a jury trial, damages up to $8 million and reinstatement to his former position at ABC.

Gov. Glenn Youngkin, who appointed Farino as CEO in April 2024, did not respond to a request for comment.