Minnesota Banker Ousted From Family Business After Coming Out Wins $3.5 Million Settlement

“I didn’t realize my sister harbored those kind of feelings," said Stephen Habberstad. "It really fries me."

Minnesota banker Stephen Habberstad has won a $3.5 million lawsuit against Country Bankers Inc., claiming he was fired after he came out as gay.

Complicating matters is the fact that the company was owned by Habberstad’s own family.

Habberstad, 61, didn’t come out until he was in his 50s—the revelation led to divorce, a family schism and, he claimed, his removal from the family banking business.

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Relatives insisted he was fired for legitimate business reasons, but Habberstad argued it was due to his sexual orientation.

Steele County District Judge Joseph Bueltel agreed.

“The truth is: Stephen Habberstad was terminated because he is gay,” Judge Bueltel wrote in a 92-page ruling. “The shareholders and directors involved in the decision to terminate Stephen Habberstad felt that Stephen, as a gay man, was a liability.”

Habberstad’s aunt Phyllis, a shareholder, once said that he “needed to get his act together, get back in the closet and get back to work.”

Farmers and Merchants State Bank of Blooming Prairie

Bueltel criticized the tactics of Habberstad’s family—including slashing his job duties and questioning the documentation of the hours he put in—as “ham-fisted attempts to obfuscate the truth.”

“People can have their own views on sexual orientation. That’s not the issue,” said Habberstad’s attorney, Leslie Lienemann. “The issue is that people have a right to work without that impacting their employment and their ability to earn a living. Discrimination happens even among people who you think are your friends and family who support you. It’s a hard reality for a lot of people.”

Habberstad says he’s just glad “I can get on with my life.”

Stephen Habberstad

“I’m still trying to get over this,” he told the Star-Tribune. “It had nothing to do with how our business was run. I was fired for being gay, and it’s just totally wrong.”

During the trial, Habberstad said his wife, Kimberly, told him that she always knew he was gay, “but did not realize it would hurt so much when it was disclosed to her.”

Their divorce was acrimonious, and Bueltel noted that her actions as they related to the case “were based on her resentment and anger associated with Stephen Habberstad being gay.”

As part of the divorce settlement, Habberstad gave her a sizable chunk of stock that cost him majority control of the company and allowed his ex-wife and his sister, Susan Boschetti, to wrest control.

Habberstad was naive to think Boschetti “would protect him through the divorce and in the corporate boardroom,” wrote Bueltel.

After Habberstad came out, she sent an e-mail to his adult children, saying, “Your dad has lived a lie for years and years and it has spilled over into the lives of his family causing a lot of heartache.”

“I didn’t realize my sister harbored those kind of feelings,” said Habberstad. “It really fries me… I’m the same person today that I was 25 years ago.”

Bueltel awarded Habberstad $798,733 in back pay, $25,000 for emotional distress and at least $100,000 a year for life (with a life expectancy of 21 years). He said he chose to award cash, and not stocks, because Habberstad might be tempted to “make mischief” or retaliate if he became a majority owner again.

The sum is believed to be the biggest payout in the state for a sexual-orientation discrimination case.

Through Country Bankers, Habberstad’s family owns Farmers and Merchants State Bank of Blooming Prairie and Citizens State Bank of Hayfield.

Dan Avery is a writer-editor who focuses on culture, breaking news and LGBT rights. His work has appeared in Newsweek, The New York Times, Time Out New York, The Advocate and elsewhere.
@ItsDanAvery