"While we cannot discuss pending litigation, I can confidently say that SAFE Federal Credit Union has long been committed to providing a work environment where all employees are treated with dignity and respect," Dr. Kay Oldhouser Davis, who chairs the SAFE board, said in a prepared statement. "SAFE does not discriminate on any basis. Our board of directors and senior management stand behind the personnel decisions made on behalf of our members and our employees, and we will continue to vigorously defend those decisions in the appropriate forum."

While religious discrimination complaints account for only a small percentage of total discrimination complaints, they have been on the rise since 1997, according to the U.S. Equal Employment Opportunity Commission. In 1997, religious discrimination complaints totaled 1,707, or 2.1% of all discrimination complaints. By 2016, those religious discrimination complaints grew to 3,825 or 4.2% of the 91,503 total discrimination complaints. Religious discrimination complaints have accused companies of refusing to hire persons or firing employees after they learned of the person's religion. Other religious discrimination complaints included companies firing workers for taking leave for religion-related events, failing to accommodate religious-related garb choices, and retaliating against employees who requested reasonable accommodations or just complained about religious discrimination, according to the EEOC.

The genesis of SAFE's alleged religious discrimination occurred on Dec. 22, 2016. On that day, Hayes walked into Merkel's office to ask about interviewing for the vacant EVP's position and a budget question regarding a Las Vegas conference. Merkel seemed happy that Hayes was seeking the EVP job and was looking forward to interviewing him in January along with the board of directors, according to Hayes' court documents.

Then the conversation shifted to the Las Vegas conference.

"I told Merkel that I really felt it was important to attend the conference itself, regardless of the location, especially since I'm not a big fan of Las Vegas because I don't drink or gamble," Hayes said in an interview with CU Times. "That's when he asked what church I go to and I told him I am a member of The Church of Jesus Christ of Latter-day Saints. He looked perplexed at my answer, so I followed it up with some people are more familiar with the term Mormon."

At that moment, Hayes claimed Merkel appeared to be taken aback and asked a few follow-up questions about his religious beliefs.

"The whole mood changed from that point on," Hayes recalled.

The next day, Merkel allegedly logged onto SAFE's HR system and revoked Hayes' application for EVP, according to Hayes.

What's more, over the next two years, until he resigned at the end of January 2019, Hayes claimed his workplace became a hostile environment under Merkel's alleged campaign of disparate treatment, ridicule, harassment, humiliation, defamation and demotion.

Merkel "expressly" denied all of these hostile workplace allegations in his court documents and tells a very different story about that Dec. 22 meeting.

The CEO denied he asked about Hayes' religion or asked any questions about his beliefs.

Merkel claimed he only knew about Hayes' religion because he discussed it openly in the office. He also denied that Hayes would be interviewed for the EVP position or that he revoked his application.

According to court documents, SAFE did not interview Hayes, or 42 of the 49 applicants, because he lacked executive leadership experience in a similar capacity within the banking services function of a financial institution.

Nevertheless, in his lawsuit, Hayes provides specific instances of how he was treated unequally compared to other employees. For example, he was not selected to participate in executive training or attend conferences that other executives who were not members of the Church of Jesus Christ were invited to.

Merkel contended Hayes was invited to participate in executive training, but he never filled out the form or followed other procedures to be considered for the training. And while the credit union initially approved Hayes' request to attend a conference, he later submitted a revised cost estimate to attend a conference that was allegedly three times higher, and that Merkel lacked the authority to approve unbudgeted expenses.

Hayes also alleged he was ridiculed and defamed by Merkel after presenting in front of the executive team the results of an auto loan spring campaign that produced a record $80 million in new collateralized loans. At the end of Hayes' presentation, Merkel allegedly said, "Not that any of that success has anything to do with you and marketing, so don't take too much credit."

The CEO denied that he made any such statement.

However, Hayes also alleged that Merkel said he did not deserve a salary raise because "even your marketing team thinks you're an idiot and an absentee boss."

Although Merkel denied he called Hayes an idiot, he did admit to calling Hayes an absentee boss because that is what his subordinates allegedly described him as.

These conflicts and others between Merkel and Hayes finally came to a breaking point in November 2018 when the CEO asked the board to cut the 2019 marketing budget by $1 million, or about 68% of the budget, which essentially crippled Hayes' ability to do his job. Merkel claimed the board decided to delay funding discretionary portions of Hayes' budget pending the completion of a brand study.

Hayes resigned from his post in January 2019 and was hired by the $298 million East Idaho Credit Union in Idaho Falls as its vice president of marketing.

In a separate legal discrimination dispute, SAFE also allegedly accused its longtime executive leader Beverly Gagne of being an absentee CEO who missed important meetings with NCUA regulators during and after their exams from 2014 to 2016 and allegedly failed to address significant compliance concerns, including "repeat findings" and a CAMEL 3 management rating. The NCUA also issued a Document of Resolution regarding Bank Secrecy Act compliance issues. A CAMEL rating of 3 indicates management and board performance needs improvement or risk management practices that are less than satisfactory given the nature of the credit union's activities, according to the NCUA. However, the credit union received a positive composite CAMEL score of 2.

Under Merkel, the NCUA issued a Camel 3 rating for management and a Document of Resolution for BSA compliance issues in 2018 and 2019, the same score that resulted from the 2016 NCUA examination under Gagne. Despite these scores, Merkel was not reprimanded by the board and it also took no adverse employment actions against him, according to Gagne's court documents.

Merkel also received a $379,000 salary, which included a bonus of $19,000 notwithstanding the Camel 3 rating for management.

In contrast, Gagne received a salary of $235,000, a $25,000 retention incentive, a $7,200 annual car allowance and other financial and non-financial benefits. Despite receiving the same Camel 3 rating as Merkel did, she was denied a salary raise in 2016 and slapped with a performance improvement plan by the board.

According to SAFE's court documents, some of Gagne's executive colleagues, who were not identified, said she could be short, rude and self-serving in her decisions, quick to blame others, given to playing favorites and resistant to input of staff members when making decisions, among other criticisms.

Because these issues and other problems were allegedly not addressed or resolved by Gagne, the board fired her on Nov. 1, 2016.

Gagne, who filed her lawsuit in January 2018, claimed that soon after she signed her final employment agreement in 2014, the SAFE board began a pattern of discriminatory and retaliatory conduct because of her age, disabilities and other issues.

During her employment contract negotiations, board members allegedly expressed their initial concerns about Gagne's advancing age and sent her a list of questions that included inquiries about her anticipated retirement. The board's mindfulness about her age allegedly remained apparent in her 2014 annual CEO evaluation, which included multiple subjective comments such as "leadership does sometimes coast, it seems perhaps with retirement in sight," a comment made by an unidentified board member.

Beginning in 2013, Gagne said she began suffering from chronic gastrointestinal health issues that progressively became worse, caused her to be late or absent from work and occasionally affected her attendance at meetings, including meetings with NCUA examiners. And in 2016, the former CEO was diagnosed with bilateral knee osteoarthritis, which limited her typical daily activities and required surgery and rehabilitation.

Because of these disabilities, Gagne claimed that SAFE took adverse employment actions against her including denying her a salary raise and firing her.

Regarding the NCUA's significant compliance concerns, Gagne noted in court documents that that the total findings by the NCUA were 16, which represented a significant improvement from 2014 when there were 24 findings. In addition, Gagne argued that due to her diligent efforts and that of her subordinates, the NCUA-issued DOR regarding BSA compliance issues were cleared and resolved within the allotted time frame.

What's more, Gagne said she addressed every concern brought by the board regarding complaints from other unnamed executives questioning her leadership.

Despite her health challenges, however, SAFE continued to produce strong financial performance from 2013 to 2016, showing positive growth in net worth, market share, loans, assets and membership, according to NCUA financial performance reports. Moreover, under Gagne's executive leadership, the credit union reached the $1 billion asset milestone in 2016, becoming one of only five credit unions that currently manage more than $1 billion in assets in South Carolina.