Former CU Executive Lawsuit Alleging Religious Discrimination Settles in Court

A religious discrimination lawsuit involving a South Carolina credit union and former executive that was fought in federal court for more than two years has been settled, according to court filings.

U.S. District Court Judge Sherri A. Lydon in Columbia, S.C., ordered the dismissal of a lawsuit brought by Toby Hayes against the $1.4 billion SAFE Federal Credit Union in Sumter and its former president/CEO Darrell D. Merkel, who retired in 2020.

The settlement’s terms were not disclosed, though both sides agreed to pay their own attorney fees and costs, according to a court document.

Both Hayes and SAFE declined comment on the settlement that was reached last month.

Hayes served as the credit union’s vice president of marketing from July 2016 and resigned in January 2019. In February, he filed a lawsuit claiming religious discrimination against the credit union in a South Carolina state court, which was moved to federal court in March.

During a conversation with Merkel in December 2016, Hayes said he mentioned that he is a member of The Church of Jesus Christ of Latter-day Saints, according to the lawsuit. Following that conversation, Hayes alleged his workplace became increasingly hostile over time, which he believed led to discrimination actions against him because of his religious affiliation.

Merkel and SAFE have flatly and repeatedly denied these allegations in court documents.

In an earlier statement, the credit union said it has long been committed to providing a work environment where all employees are treated with dignity and respect, and that SAFE does not discriminate on any basis.

After earlier efforts to settle the dispute failed in November 2019, Hayes, the credit union and Merkel traded motions that hotly contested each other’s legal arguments and claims through Aug. 13, 2021. The settlement that dismissed the case was posted on the federal docket on Aug. 18.