The city has settled a race discrimination lawsuit brought by a former City Light employee, who was awarded more than a half-million dollars two years ago by a jury that agreed she had endured workplace hostility.

The city has settled a discrimination lawsuit for $812,250 with a former City Light employee, who was awarded more than a half-million dollars two years ago by a jury that agreed she had endured workplace hostility because of her race.

In 2007, a jury awarded Mattie Bailey $503,000 for race discrimination and harassment following a six-week trial. The city appealed, and the appeals courts upheld the harassment verdict but threw out the damage award because the statute of limitations had expired. Bailey had argued that she’d been underpaid since the mid-1990s.

State courts` overturned the pay claim following a U.S. Supreme Court decision that held, under federal law, the statute of limitations begins to run when the first paycheck is issued, rather than when the plaintiff learns she is being underpaid.

It was sent back for another trial on damages, but the settlement announced today was reached before it went to trial, according to her attorney, Jack Sheridan.

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While the settlement was more than Bailey received from the jury, about $300,000 will go to legal fees, Sheridan said.

Jean Boler, an assistant city attorney, said the city decided to settle the case to avoid incurring additional legal costs. “It was the best business decision to resolve the matter at this point,” she said, adding that the award was made two years ago “and now we’re finally paying it.”

Bailey, who is African American, worked for City Light from 1981 until her retirement in 2008. She worked as a manager and was head of City Light’s communication division. When City Light hired Gary Zarker as director, he reorganized Bailey’s division, took away her responsibilities and gave them to white employees, said Sheridan.

She was removed from most of her managerial duties and given clerical work, Sheridan said, and she faced racially-motivated comments from her superiors.

The jury found Bailey endured workplace hostility because of her race and was not paid equitably for her work.

The jury verdict found City Light discriminated against her and another long-term employee, Phi Trinh, A hydroelectric power supervisor. He was awarded $947,000, which the city paid.

At the time of the award, it was the fifth time in a decade that City Light had either settled or had a jury rule against it in a racial-discrimination case. The four previous cases cost the city-owned utility more than $1 million.

“Mattie was a great manager,” Sheridan said, “and the city wasted her as a resource because it allowed the good old boys to run the utility instead of awarding jobs on merit.”

Bailey now teaches civil-rights classes at Central Seattle Community College.

Susan Gilmore: 206-464-2054 or sgilmore@seattletimes.com