(CNN)Arizona Secretary of State Katie Hobbs -- best known nationally for taking a stand against former President Donald Trump's claims of election fraud -- entered this year's governor's race as the prohibitive favorite among Democrats. But her involvement in an employee termination seven years ago threatens to weaken her candidacy in a purple state Democrats are hoping to turn more blue in November.
At issue is the 2015 termination of the only Black policy staffer working in the state Senate when Hobbs was Democratic leader in the chamber. Hobbs' role -- and the way she's spoken about it recently -- has divided leaders in the state's Black community, jeopardizing her support among a key constituency as she heads into a bruising election year in a state President Joe Biden won by fewer than 11,000 votes.
Five Black leaders who spoke to CNN said the case has struck a nerve in Arizona, not only because of their historical marginalization in the workplace, but also because of the state's history of discrimination against voters of color, which was compounded by the efforts of Trump and his allies to overturn the 2020 presidential election results.
Hobbs offered an extensive apology in early December -- stating that she now recognizes that her "experience and understanding of racism has sometimes been too narrow." And her allies insist that those who have spoken out against her were unlikely to back her candidacy anyway. But it remains to be seen how voters will respond as her Democratic rivals raise it as a campaign issue ahead of the August primary.
The controversy arose shortly after Hobbs was elected Democratic leader in the Arizona state Senate in late 2014. Attorney Talonya Adams, a Senate policy adviser, alleged that she was paid less than White men who were serving in similar roles in the legislature and said she was fired after asking supervisors, including Hobbs, about staff salaries.
In two federal jury trials alleging discrimination based on race and sex by the Arizona Senate, Adams represented herself and won. A federal jury first awarded her $1 million in 2019. But the judge ordered a new trial in response to arguments from the state that Adams had failed to present sufficient evidence for the jury's finding that the state Senate retaliated against her for complaining that her lower pay resulted from discrimination.
That second trial concluded in November, with a federal jury awarding Adams $2.75 million. It found she "complained that she was being discriminated against on the basis of race or sex with respect to her pay and was terminated for that reason." The judge reduced the damages to $300,000 -- along with back pay Adams was owed -- due to limits on compensatory damages.
Talonya Adams speaks to reporters outside the federal courthouse in Phoenix on December 9, 2021.
The Arizona Senate has not indicated whether it will appeal the second verdict, and Adams told CNN she is taking steps to sue Hobbs personally, alleging that the Democratic secretary of state has damaged her reputation by suggesting outside of court that Adams was fired because of unspecified performance issues, rather than race and gender. Hobbs told the Arizona Mirror in November, "I can say with certainty on my part, my decision in the termination was not based on race or gender. There were other factors."
Through a campaign spokeswoman, Hobbs declined to speak to CNN for this story and did not respond to a series of written questions about the case and her handling of the termination. Attorneys representing the Arizona Senate did not respond to CNN's requests to discuss their arguments in the case.
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But Hobbs testified that Adams was insubordinate by repeatedly raising questions about employment issues in 2015 -- including with multiple Democratic lawmakers after she was told they should be directed to the Democratic chief of staff. Hobbs said Adams showed a similar pattern of refusing to drop what Hobbs viewed as a settled issue with Adams' 2014 request for time off related to academic field work for her MBA program.
Hobbs also testified in 2021 that she was new in the Senate minority leader role during the 2015 episode with Adams and that she came to learn that "the system doesn't work right" and was sorry that she hadn't done more to address "pay equity." Because Republicans were in the majority, she testified, "the Democratic staff, who happened to be more reflective of Arizona in terms of diversity, got paid less because those decisions were made by the majority."
But the case has become a central point of contention in the Democratic gubernatorial primary that appears unlikely to recede from the headlines -- both because of Hobbs' response to the November verdict and the controversy over her decision to terminate Adams in 2015, which she made in consultation with then-Democratic chief of staff Jeff Winkler and then-Senate Republican chief of staff Wendy Baldo. It has created disquiet about her judgment and the vulnerability of her candidacy within her party, according to a half-dozen Arizona Democratic strategists, lawmakers and activists who spoke to CNN on background to discuss the dynamics of the race.
Hobbs' equivocation about the case after the November verdict -- including two different statements released weeks apart -- drew criticism from many corners, including from both her Democratic and Republican opponents. She at first did not take responsibility for the discrimination against Adams -- with her campaign blaming the Republican Senate leadership.
In that first statement, Hobbs' spokesperson told the Arizona Republic, "the Republican majority chief of staff acted as her supervisor and the ultimate decision-maker regarding the termination of her employment." But that assertion conflicts with Baldo's testimony in the 2021 trial about the basis for the decision when she told Adams under direct questioning that the "decision was made by Minority Leader Katie Hobbs and Jeff Winkler to terminate you. And they asked me in my role as chief of staff to contact you." Winkler and Baldo did not respond to CNN's requests for comment.
Six prominent Black Arizona leaders released a statement in November calling on voters to "reconsider" their support for Hobbs as governor, because of what they view as her "unjust actions" toward Adams, her initial refusal to admit that discrimination occurred, and her failure to "take responsibility for her role in the retaliatory termination."
Hobbs' two Democratic rivals -- former state Rep. Aaron Lieberman and former Nogales Mayor Marco Lopez -- have expressed concerns that voters of color might stay home if Hobbs is the party's nominee. The eventual nominee could face Trump-backed candidate Kari Lake, who has repeated the former President's election lies, in November. GOP Gov. Doug Ducey is term-limited and not running.
"If we alienate diverse communities, they won't show up for us as Democrats, and we're going to lose. That's, that's what's at stake," Lopez, a former Obama administration official, told CNN. "To have someone (in Hobbs' position) who is trying to lead the ticket and trying to lead a state that has a history of demonizing people of color is really troublesome as a party."
Lieberman argued that Hobbs' role in firing an employee who repeatedly complained about her pay violated core Democratic values. "We want to uplift people; we want equal pay for equal work, and we want to fight against discrimination, not take part in it," he said. "The jury has spoken now twice, that Katie was part of this really unfortunate incident."
Normally Republicans "have to be creative and figure out how they are going to attack our candidates," Lieberman added. "These negative ads have already been written -- it's just Talonya Adams speaking to camera directly and saying Katie Hobbs is unfit to be governor," he added, explaining how he expects Adams' public comments in recent press conferences to be used against the party's would-be nominee in a general election.
Hobbs promises to do better
With the advantage of more than six months to go before the primary, Hobbs has been working to make amends.
In a December Twitter video, she said she understood that her first response to the November verdict was "unnecessarily defensive" and "fell short of taking real accountability," adding that she was "truly sorry for the real harm that I caused Ms. Adams and her family."
"What Ms. Adams experienced is yet another example of the systemic inequities and racism that have long permeated every aspect of our lives, too often in ways that are invisible to people like me," Hobbs, who is White, said in the video.
She added that she has "missed personal and leadership opportunities to fight harder for racial equity." She promised she would work not only to be "an ally," but also an "advocate" going forward, and vowed to recruit and "elevate" women and people of color to leadership positions on her campaign.
Those who are championing Hobbs' candidacy insist that she has yet to lose significant support for her campaign. They point to Black leaders like Garrick McFadden, the former vice chair of the Arizona Democratic Party, who was critical of Hobbs after the 2019 verdict, but now argues that she understands her mistakes and has taken real accountability for her actions.
McFadden pointed to what he sees as Hobbs' more recent work to right injustices, including her advocacy for removing Confederate monuments from the state Capitol grounds, as well as her efforts as secretary of state to correct pay inequities after The Arizona Republic published a database of public employee salaries statewide in 2019.
Her campaign aides say that as secretary of state she has focused specifically on giving raises to women of color, some of whom were making less than $15 per hour, and on increasing diversity, with employees of color now comprising nearly 43% of the office's staff compared to 33% when she arrived, according to figures compiled by the office. Her senior leadership team at the secretary of state's office is primarily composed of women, according to her campaign.
Hobbs' allies say she has also been laser-focused on preventing the disenfranchisement of voters of color in her current role, which McFadden said has opened her eyes to the more subtle forms of racism that exist in Arizona.
"Doing her job in a state that was protected under the Voting Rights Act, she knows about the disenfranchisement of Black voters, of voters of color -- especially in Arizona (among) Latinos and indigenous people. To do her job, she had to evolve," McFadden said.
But Karl Gentles, co-chair of the Black Engagement Committee of the Maricopa County Democratic Party, said the rollout of Hobbs' apology about the jury verdict "was not the most effective, nor successful" and that there's "still a lot of work to be done to regain the trust and confidence of voters."
"There are some in the African American community who are willing to give (Hobbs) a chance, but obviously there are others who have taken a real wait-and-see position in terms of looking for actions, instead of words," he said.
Not only did Adams represent herself and win in federal court twice, Gentles said, "but she showed others that they could stand up for themselves, fight for themselves, and have a voice and not accept the status quo."
"She has exposed some systemic issues that we as African Americans have known and experienced for many, many years -- and have never had the real voice or opportunity to bring to light," he said.
Warren Stewart Jr. called Hobb's December apology "too late."
Warren Stewart Jr., a pastor and activist, said the controversy is forcing a reckoning about racism within the ranks of the Arizona Democratic Party -- and he called on the state party to ask Hobbs to step aside in the governor's race. CNN has reached out to the state party.
Stewart, who also co-chairs the county party's Black Engagement Committee but spoke to CNN in his personal capacity, said he was troubled by Hobbs' responses to questions about the case from the committee in a vetting session that they did with her after the November verdict. "Her response was very well scripted, but it was not taking responsibility; it was not apologetic," he said. Stewart called her subsequent December apology "too late."
The Adams case has shown, Stewart said, that "we really have to vet our politicians and elected officials to see if Black lives do matter, and if the rights of all people -- groups that are oppressed and marginalized -- matter," he said.
"I'm at a place where I am not impressed by apologies and videos," Stewart said. "I think the most noble thing that Katie could do is to step down and wait until she has proven herself as a leader."
Some of Hobbs' critics, including Stewart, have also cited the 2013 ouster of the first Black minority leader in the Arizona Senate as a reason for concern. Hobbs joined the majority of the Democratic caucus in voting to remove former Senate Minority Leader Leah Landrum Taylor from her leadership position, which angered some other Democratic members.
Hobbs testified that the ouster was the result of an internal caucus dispute, but Taylor testified that the move was "unprecedented" and that she "did not have any idea why" she was ousted from her post. Taylor declined CNN's request for comment.
Leah Landrum Taylor, seen in her office at the Arizona state Senate in 2014, was ousted as minority leader in 2013.
'I feel strongly that I'm being treated differently'
The conflict between Adams and Hobbs at the Arizona Senate arose in February of 2015, more than two years after Adams joined the staff as a policy adviser and shortly after Hobbs ascended to the position of minority leader.
Adams, who was making $60,000 a year, told CNN that she had long suspected that she was being paid less than her male colleagues. She testified that she met with Hobbs and Winkler, the Democratic chief of staff, in February 2015 to raise concerns about her workload and her salary. She told CNN that she argued in the initial meetings that her workload staffing legislative committees was heavier and more challenging than that of several of her male counterparts. But Winkler testified that while Adams handled three committees and several other policy staffers only staffed two, they had other duties as part of their job descriptions (like serving as communications director, for example).
Adams testified during the 2019 trial that she raised her concerns about discrimination with several lawmakers, as well as Baldo, the Republican chief of staff. Adams said she told Baldo that she believed women were "underwriting the work of these men and that I feel strongly that I'm being treated differently," according to court transcripts.
Hobbs and Winkler rebuffed her requests to discuss her salary, Adams told CNN, telling her they could not engage in those kinds of discussions until after the legislative session because of an agreement with Republicans. Hobbs testified in November that she became concerned by Adams' "series of requests" wanting to discuss employment issues.
The issue came to a head when the Arizona Capitol Times published a list of Senate salaries and Adams discovered not only that several of her White male counterparts were receiving higher salaries, but that several had also received raises. She reached out about the protocol for requesting a raise to the Republican chief of staff, who, Adams said, told her to email her Democratic leadership team.
Adams did that, asking them to discuss her status on the team -- to which Hobbs responded that her request was inappropriate, referring her back to the Democratic chief of staff. Hobbs testified in the first trial that she was "disturbed" by Adams' conduct -- reaching out to the entire leadership team about her salary concerns after she had already been rebuffed -- and viewed the email as manipulative.
"I don't remember the timeline or how many times this happened, but when we didn't give Ms. Adams the answer that she wanted, she went to -- directly to... Wendy (Baldo) or the Senate president, even after being redirected (to Winkler) multiple times," Hobbs said, according to court transcripts from the second trial.
Hobbs said in 2019 testimony that the Senate Democratic Caucus aides "were the lowest paid staff of all the legislative staff" and she and her colleagues were "trying to fight for increased pay" at that time.
Salaries had long been a subject of contention within the Arizona legislature, Winkler noted during the first trial, because there is no agreement between the House and Senate about what the appropriate salary level is for similar jobs.
Hobbs, seen here in December 2020, is best known nationally for taking a stand against former President Donald Trump's claims of election fraud.
Several aides who worked in the Arizona legislature at the same time as Adams, who asked to remain anonymous in interviews with CNN because of fear of retribution, echoed Hobbs' argument in her testimony that the pay disparities for staffers stemmed not from issues of race and gender, but rather from the fact that Republicans held majority control, limiting the purse strings of Democrats. They said they believed Hobbs has been unfairly portrayed during coverage of the trial, arguing that she has long been committed to equity and advancing opportunities for both women and aides of color.
Aside from the salary discussions, Hobbs cited one previous instance to justify her view that Adams showed a pattern of refusing to drop what Hobbs considered to be a settled issue, arguing that she felt Adams was "untruthful" about her request for time off for the trip that was required as part of her MBA coursework. Hobbs said she had discovered Adams wasn't allowed to take time off under a previous agreement with the Senate allowing her to pursue the degree, but Adams told CNN the agreement was "subject to revision."
Hobbs testified that she never documented any concerns about Adams or pursued any disciplinary action against her. Asked about Adams' skills and performance during the earlier trial, Hobbs testified that she believed Adams was "very competent" in her role as a policy adviser during the two years they had worked together.
Winkler testified in 2019, however, that Adams was "out of the office a lot, and I think that was noted by most members of the staff." Adams denied that there were ever any issues with her performance when asked about the criticisms by CNN.
Adams' termination
Adams' notification of her termination eventually came when she was out of town caring for her son.
On the same Friday that she reached out about the salary discrepancies published in the Capitol Times, she emailed Winkler and copied Hobbs to notify them that her son was having emergency medical issues, that it was "touch and go," and that she would likely need to travel to Seattle. Winkler responded in an email that was shown in court that "family comes first" and that she should do what she needed to do for her son.
But Winkler testified that he did not perceive his response as approval for Adams to leave immediately for Seattle -- which she did that weekend -- and that he believed Adams was still going to meet at his office on Monday to discuss her pay concerns and an inquiry she had made about the family and medical leave policy.
When Adams did not appear at work that Monday, Winkler engaged in a series of meetings with Hobbs and Baldo about her. He testified that she had given "no notice that she was actually leaving" and "no handoff" to the team. (During the trial, Adams presented phone records showing she had contacted both the main line at the office, and Winkler directly, four times on that first Monday that she was gone, starting early that morning).
Though Hobbs was copied on Adams' Friday night email explaining her son's emergency medical needs, Hobbs testified that she also did not think Winkler's response amounted to approval of emergency leave and testified that she did not know why Adams had left. "It is not my understanding at all that any of us knew that there was an emergency that needed to be attended to," Hobbs said, according to court transcripts.
Winkler testified that the "conversation about termination ensued" after he asked Hobbs whether she trusted Adams, and the then-minority leader responded that she did not.
"It's a problem if the leader of the caucus doesn't trust an individual member of the staff," he said, calling the termination a "consensus decision."
Adams was terminated for "abandonment of position" and "insubordinate behavior," according to Winkler's November testimony.
Hobbs had testified in 2019 that it's "never an easy decision to terminate someone's employment," but "I think we all agreed that we had lost trust and confidence in Ms. Adams and that was why that decision was made."
Adams told CNN she was stunned that Hobbs made so little effort to understand or address the pay and workload issues that she raised -- and showed "no care and no concern" as to why she was absent from work at the time that she was terminated.
"You are going to take away someone's livelihood from them for reasons seven years later that you can't even remember or articulate, and had no direct knowledge of at all?" Adams told CNN, calling that a "blatant disregard" for an employee's welfare. "I mean, I'm the only African American staffer in either chamber, right? And nothing in her mind says: 'Can we just see what's going on here?'"
In addition to apologizing to Adams in a 2019 statement, Hobbs testified that she left Adams a voicemail and told her she wished she'd been a "better ally."
Adams said she still has never spoken to Hobbs directly beyond their interactions in court since she was fired, and that she believes Hobbs' public apology in December was driven by political pressure.
"She has always, up until the second week of November of 2021, been adamant, been righteously indignant -- it has been a point of pride -- that she has been justified," Adams said.
"She has articulated proudly and loudly in many different venues her decision to terminate my employment, so to see this about-face eleven-and-a-half months out from a gubernatorial election, it's shocking. It really is shocking."
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