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PARK CITY — Veterans Trading Co., a Park City-based business under legal fire for allegedly firing an executive who was on military leave, has filed a civil lawsuit insisting others at the business were never made aware of the man's active military commitments.
Veterans Trading is faced with a lawsuit from the U.S. Department of Justice for reportedly firing and then denying re-employment to company president Paul Costello in July 2013.
The DOJ announced this week it would be seeking damages equal to Costello's lost wages and shares in Veterans Trading, citing the federal Uniformed Services Employment and Reemployment Rights Act, which makes it illegal to withhold employment to military members because of their armed service responsibilities.
However, the company's own lawsuit, filed in 3rd District Court in late April, claims Costello never informed anyone at Veterans Trading of his active-duty military status. The lawsuit initiated by Veterans Trading was later transferred to federal court.
At no time did (Veterans Trading) know or understand that Costello was on active military duty until long after he was terminated from the company.
–Veteran's Trading Co. lawsuit
"Costello had a duty to disclose his military leave status to (Veterans Trading)," the lawsuit states. "Costello knew of his military status, was the only one in a position to know of such status, knew of the duty to disclose such to (the business), but failed to do so in order to continue to receive the benefits of the office of interim president."
As president, Costello was making $36,000 per year and receiving other benefits, including a 25 percent ownership of the company, the lawsuit states. However, Costello became uncooperative in the day-to-day operation of Veterans Trading, the lawsuit says.
"As Costello's title and responsibilities increased, the time he dedicated to (the company) decreased," the civil suit reads.
Costello was severed from the company for violating official policy by not attending mandatory board meetings in May and June 2013, the company claims. The company says Costello gave no reason for missing the first meeting and told another executive he missed the second one for an anniversary.
Veterans Trading removed Costello from the company that summer, according to the lawsuit, "solely as a result of Costello's ongoing poor performance, poor attitude, and lack of participation, including his missing two consecutive meetings."
The DOJ's complaint disagrees.
Costello’s military service was a motivating factor in (the company's) decisions to deny his request for re-employment and, ultimately, to terminate his employment.
"Costello’s military service was a motivating factor in (the company's) decisions to deny his request for re-employment and, ultimately, to terminate his employment," the department said in a prepared statement.
The company's lawsuit, which seeks monetary damages against Costello, centers on the argument that Veterans Trading was unaware of his active military service and wasn't responsible for being aware without his cooperation.
"At no time did (Veterans Trading) know or understand that Costello was on active military duty until long after he was terminated from the company," the lawsuit reads.
Veterans Trading specializes in "supply chain management and industrial distribution" and works with aerospace contractors, according the company's website. It was founded in 2005.
Costello is a Naval Reserve captain with previous experience as an F-18 fighter pilot. The veteran suffers from a disability, the DOJ says. He originally filed a complaint against Veterans Trading with the U.S. Department of Labor, but the complaint was not resolved and subsequently referred to the DOJ.