Terry E. Maloy is suing the $398 million Community 1^st Credit Union he led as the CEO and president, claiming in a recently filed lawsuit that he is entitled to a $1.5 million retention benefit because the Ottumwa, Iowa, credit union failed to prove he violated its harassment and non-discrimination policy.

Maloy joined the former Deere Community CU in 2004 as its vice president of strategic planning and became president/CEO of the re-named Community 1st in 2006.

Maloy was fired July 8, 2011 by Community 1^st's board of directors. The board, however, did not give a reason or cause for his termination, according to the lawsuit filed last week in U.S. District Court in Des Moines, Iowa.

After Maloy filed a claim for his benefits in September, the board rejected it because he allegedly violated the credit union's harassment and non-discrimination policy.

According to the lawsuit, the board's allegations were based on evidence from an investigation that showed Maloy was “placing his hands and giving shoulder rubs and hugs” to two female employees. The board also determined a sexual harassment complaint filed by one of the female employees was credible, the lawsuit said.

These allegations were based on emails, employee witnesses, including the credit union's “building committee noticing Mr. Maloy touching employees and instructing him not to do so.”

However, Maloy alleges the board of directors simply determined the credibility of the sexual harassment complaint based on its details, not on the corroboration of any facts, according to court documents.

What's more, court documents show board members had doubts about the credibility of the sexual harassment complaint after reviewing emails between Maloy and the female employee, Maloy replies in the documents. 

He said four emails contradict the facts in the sexual harassment complaint, and charges that the board of directors failed to consider the emails because they were detrimental to their position.

Emails seeking comment from Community 1^st Credit Union and Maloy's lawyer were not returned Tuesday.