A former Lehigh Valley Health Network employee is suing LVHN and parent Jefferson Health, alleging that he was fired for opposing what he described as a financial engineering scheme.

In a suit filed Feb. 11, John Bennett, a former high-level employee in both networks, alleges that LVHN and later Jefferson violated Pennsylvania’s whistleblower law and wrongfully terminated him after he raised concerns about a financial deal the health networks were pursuing.

A Jefferson spokesperson declined to comment, saying the network does not comment on ongoing litigation.

Bennett, the lawsuit says, was vice president of facilities management for design and construction at LVHN and oversaw major capital projects exceeding $50 million across the Jefferson footprint after the networks’ 2024 merger. The suit says he was fired in October after he repeatedly spoke out against a plan to generate short-term capital project funding that he believed would have locked the network into a contract that was fraudulent in nature and would have led to the network’s paying excessive long-term costs.

According to Bennett’s complaint, in 2023, LVHN began pursuing a deal with an “energy as a service agreement” company and signed a two-year nondisclosure due diligence agreement.

Under the proposed deal, LVHN would receive a large amount of cash up front, equal to the projected amount that the network would save on energy costs throughout the duration of the service contract. The network could use this money to upgrade its energy infrastructure with new boilers, solar, capital projects or something else.

However, the network would be locked into a decades-long contract, where it would pay what Bennett believed were “excessive costs” that would be $20 million to $30 million higher than if the network had gone with traditional upfront financing.

When they don’t have the spare cash, hospitals often finance capital projects through tax-exempt municipal bonds, a type of fixed-rate debt. However, taking on too much debt could affect bond ratings and the hospital’s ability to access more favorable interest rates. According to the suit, under the deal, LVHN or Jefferson could receive a large lump sum of money to use on capital projects without adversely affecting their bond rating or ability to borrow funds.

Bennett said he raised concerns about the deal, including the use of third-party buyers that would purchase 10% of the energy produced on the hospital’s energy grid.

According to the suit, the third-party buyers that the network identified were miles away from Lehigh Valley Hospital-Cedar Crest, and would need to be serviced via miles of new piping. There were also no finalized agreements with these buyers, who could back out at anytime. But a representative of the company allegedly said it only needed to show intent to identify third-party buyers, not actual commitment, the suit states.

Bennett concluded that relying on expectations that might not pan out to secure favorable accounting, balance sheet and tax-exempt bond status would pose legal, regulatory and public-funds compliance risks, the suit states. He sent an internal recommendation to LVHN’s then-chief operating officer in February 2024, suggesting the network either end the due diligence agreement or find a third party to review it — a move that could potentially violate the nondisclosure agreement the network signed.

In May, according to the suit, Bennett was told by network leadership that the transaction had been paused and wouldn’t go further because of the pending merger with Jefferson Health.

After the Jefferson merger, the complaint states that Bennett received more responsibilities in the new network. In August, when Jefferson laid off hundreds of employees due to financial difficulties it was experiencing, he said he was told by network leadership that he and the rest of his department would not be laid off because it was already running lean and everyone there was needed.

Not long after the layoffs, Bennett said he found out that Jefferson planned to restart the agreement. He responded by sending his supervisors in Jefferson’s enterprise asset management department an internal recommendation similar to the one he’d sent in February 2024. On Oct. 8, during an executive meeting for the department, Bennett said he once again raised his concerns about the energy as a service agreement. On Oct. 12, he was informed that his position was being eliminated.

It’s unclear if Jefferson completed a deal, or if talks are ongoing.

Bennett is claiming his firing was done in retaliation for his complaints.

He is seeking damages in the form of lost wages, benefits, future earnings, reputation harm and emotional distress and is seeking an unspecified amount equal to lost back pay, front pay, compensatory damages, punitive damages and attorney’s fees as well as reinstatement.