Globe U whistleblower collects as school battles Minnesota AG, falling enrollment

In the four years since she was fired, Heidi Weber has become something of a celebrity.

She's told her story in the halls of Congress. On the radio. At a national conference.

But mostly, she says, she's been waiting for vindication.

In 2013, Weber won nearly $400,000 in a lawsuit against her former employer, Globe University, which she accused of firing her as a college dean for complaining about unethical practices.

It was, experts say, one of the first whistleblower cases in the country to result in a jury award against a for-profit college. But the case has lingered on appeal, until now.

In March, the Minnesota Supreme Court rejected Globe's final appeal, clearing the way for Weber to get her check — and a chance to celebrate. "It's almost surreal," said Weber, 46, who lives in Prescott, Wis.. "You don't often hear a story about the little guy winning."

For Globe, a chain of career schools based in Woodbury, the court ruling was the latest in a string of setbacks — including a lawsuit by Minnesota's Attorney General — that have battered its reputation and contributed to a 60 percent drop in enrollment since 2010.

Even now, Globe officials are unapologetic about their actions. They reject the implication at the heart of Weber's case — that they will do or say anything to lure students into questionable programs.

"We felt the need to defend ourselves," said Jeanne Herrmann, Globe's chief operating officer. "Because we so strenuously, vigorously believe that we did the right thing."

Before its clash with Weber, Globe was enjoying unprecedented success. Since 2003, it opened 16 new campuses, and enrollment had more than tripled to nearly 12,000.

Unlike many for-profit colleges, Globe had a long history — it was founded in 1885 as a business school in St. Paul — and is still "mom and pop owned," as Herrmann put it. It had about 100 students when it was bought in 1972 by businessman Terry Myhre and his family, who built it into a multistate corporation with 19 campuses and a mix of academic degrees, online and career programs, including one for medical assistants.

Weber, a medical assistant herself, had just started dabbling in teaching when she joined Globe in 2008 as a part-time instructor. Sixteen months later, she was promoted to dean of its medical assistant program, with 1,800 students on multiple campuses.

The first red flag, she says, were the conversations she overheard with prospective students. "My office was right next to the admissions representatives," said Weber. "I don't want to use the word lying. It was definitely spinning … saying anything to make the student enroll." In her program, a two-year degree cost $44,000.

"The thing that troubled me about that is that medical assistants typically make anywhere between $10 and $14 an hour," she said.

At first, she said, she was hesitant to complain. "You're in a new job, so you don't want to create too many waves." But before long, Weber said, students were peppering her with their own complaints. She became concerned, court records show, that Globe was using deceptive job-placement rates for its graduates, and giving false assurances that its credits would transfer to other colleges.

A supervisor told her not to put anything negative in writing, she says. But by early 2011, her first anniversary on the job, Weber was sending e-mails up the chain of command. "[I] told them everything: 'This is wrong, this is unethical, you're going to get sued,' " she said. At one point, she says, she was told point blank: "You better learn to be quiet if you want to make sure you still have a job."

In April, just days after meeting with top executives to review her concerns, she was fired.

In court, Globe disputed much of Weber's account. The company's lawyers argued that none of her allegations about misleading students was ever proven and that Weber was fired for "performance and a lack of leadership."

Clayton Halunen, a Minneapolis employment lawyer, said he decided to take her case because Weber had kept such a detailed timeline.

Not only did she have the e-mails, but Weber had received a raise and a positive job review the month before she was fired. "With those facts," Halunen said, "it wasn't ambiguous."

In 2012, he sued Globe on behalf of Weber and another former dean, Jeanne St. Claire, who said she was fired for raising similar concerns.

Most whistleblower cases, like most lawsuits, never get to a jury, Halunen notes. They're either settled or dismissed. But Weber's case defied the odds.

In August 2013, a Washington County jury sided with Weber after a weeklong trial, awarding her nearly $400,000 for lost wages and emotional distress. The court also awarded her attorney fees, raising the total judgment to more than $1 million.

The verdict was a milestone in the world of for-profit colleges, says David Halperin, a Washington, D.C., lawyer and outspoken industry critic. Across the country, he noted, many for-profit colleges are under investigation by federal and state agencies for allegedly deceptive marketing. But it's rare, he said, for an insider like Weber to challenge one in court, and win.

"I think it's enormously important," he said, "because it showed that an individual can take on a very powerful company in a very powerful industry and prevail."

Globe appealed. It also settled St. Claire's lawsuit out of court.

To Globe, the headlines were more damaging than the verdict itself.

"It was a very new experience for us to be put in this light," said Herrmann, who has been with Globe for 20 years.

She insists that Globe doesn't mislead anyone, and that it's always upfront with students about potential problems, such as difficulty transferring credits. "I would tell you today, transfer of credits is still a problem," she said. But she attributes that to discrimination against for-profit schools, not to deficiencies in the program.

"Employers in our communities know the skill sets that our students come out with," she said. "We've built a strong reputation by putting good students out there to work."

But the Weber case set off a string of bad news. Shortly before the verdict, Globe learned that Minnesota Attorney General Lori Swanson was investigating its practices. Swanson filed suit in 2014, accusing Globe and its sister school, the Minnesota School of Business, of defrauding students in their criminal justice programs.

Swanson, who met with Weber during the investigation, said she found her "very credible." "It really, in many ways, corroborated what we were hearing from students," she said. So far, more than 100 former students have filed sworn statements saying they were lured by false promises or high-pressure sales tactics.

Globe denies the allegations, and says that the complaints reflect only a tiny fraction of its student body.

"Just like any business out there, we will never ever be profitable if we don't do right by our customers," said Herrmann. "Our customers are our students and the employers who hire them."

Swanson's lawsuit is scheduled for trial in November, but the damage has been done, says Herrmann. The bad publicity, she says, clearly hurt enrollment, which plunged from 11,666 in 2010 to about 4,500 this year. Meanwhile, the Defense Department has put the school on probation, restricting the use of military tuition benefits at Globe.

Herrmann said the company is determined to fight for its reputation.

"For our graduates, tens of thousands of graduates over the course of the years, the value of their degree is put under question now," she said. At the same time, she said, "It's really disheartening to have the integrity of our individual employees be questioned day after day."

Weber, meanwhile, says she has no regrets about waging her own legal battle. "It wasn't about the money, and it still isn't," she said. "The point is, the for-profit system, in my opinion, is skewed. [It's] not a place where education is the top priority. Profit is.

"The public is now starting to realize this."

Maura Lerner • 612-673-7384