Central Alabama Water quietly approved the resolution of three unnamed cases on October 22, 2026, while lawsuits filed by ousted top executives also appear to have been settled. Whether those lawsuits were among the three cases is unclear, and the utility is not saying how much the deals will cost ratepayers. The legal disputes stemmed from a bitter leadership shakeup at the regional water board and could be worth millions of dollars based on the executives' former contracts, though the exact terms remain undisclosed.
The lawsuits came from former Birmingham Water Works General Manager Mac Underwood and assistant general managers Barry Williams and Michael Parker, who sued the newly configured Central Alabama Water board and its CEO, according to AL.com. The trio alleged breach of contract, wrongful termination, conspiracy and fraudulent representation, claiming the board and its new chief executive conspired to violate their employment agreements and push them out of their jobs, as reported by al.com.
Underwood, who led the utility's daily operations, was paid $446,118 a year under a five-year contract approved in March 2025. His potential payout under that deal would total more than $2.2 million, not including benefits. Williams and Parker, the assistant general managers, each had an average salary of $334,000 and agreements guaranteeing a year's salary if they were terminated.
A Leadership Purge Set Off the Legal Fight
The dispute traces back to November 20, 2025, when the board hired Jeffrey Thompson as CEO. Underwood was placed on administrative leave with pay that same day, and Williams and Parker were sent home within hours of Thompson's hiring, according to the same al.com report. Weeks later, on December 15, 2025, the board confirmed a new leadership team, a move that set the stage for the lawsuits that followed.
Two other senior managers were also sent home in November 2025 but are not part of the litigation, per al.com's reporting. Jefferson County Circuit Judge Pat Ballard consolidated the Underwood, Williams and Parker cases into a single matter on October 23, 2026, but digital court records contained no document or order detailing what happened at a hearing held that Monday morning. Ballard declined to comment to al.com, as did John Sommerville, the attorney representing Underwood, Williams and Parker. Central Alabama Water did not answer questions from al.com about the settlements.
Board Vote Authorized a Mediator's Proposal
Behind closed doors, the board entered executive session before approving the resolution of three unnamed cases. Board Vice Chairman Phillip Wiedmeyer said the utility should accept the mediator's proposal in what were labeled cases 1, 2 and 3, according to al.com's account of the meeting. The board's vote authorized its counsel to prepare settlement agreements, releases or pleadings to finalize the resolution, empowered the board chair to execute documents on the utility's behalf, and allowed the CEO to take whatever actions the mediator's proposal required. Settlement amounts for the three cases were not made public. Separately, al.com described the Underwood, Williams and Parker lawsuits as appearing settled, but it remains unclear whether those lawsuits were among the three cases approved for resolution.
Echoes of a Costly Settlement With the Utility's Former Lawyer
This is not the first time Central Alabama Water has paid heavily to resolve a fight with a former top employee. Mark Parnell, the utility's former deputy general manager and general counsel, had a contract providing a $660,000 annual salary plus benefits, with a total compensation package exceeding $3 million, according to al.com. New regional board leaders fired Parnell on June 2, 2025, amid public outcry over the timing and size of his contract, which the prior Birmingham Water Works board had approved at its final meeting.
Parnell filed suit in September 2025 demanding payment under his contract, and the board ultimately approved a $2.4 million settlement, as confirmed by WBRC. The deal included a non-terminable three-year consulting agreement paying Parnell 35 monthly installments of $28,000 plus a final payment of $20,000, according to ABC 3340. WBRC separately reported the arrangement as including a $1 million payout or annuity in January 2026, a $1 million consulting agreement spread over three years, and a one-time $400,000 payment contingent on court approval. ABC 3340 noted that Parnell is now working as a consultant for the board. Central Alabama Water released a statement affirming that Parnell's original contract was valid when the previous water works board approved it.
The pattern of costly exits has repeated itself across the utility's leadership turmoil. As BirminghamWatch has reported, the water board previously settled the Parnell matter in October, a dispute tied to an employment contract that the prior board had authorized around the same time as other controversial hires.
What Remains Unresolved
With settlement amounts for the Underwood, Williams and Parker lawsuits still undisclosed, al.com described them as appearing settled while the public details remain unclear. The potential total could reach millions of dollars given the salaries and contract terms involved, but neither the utility nor the attorneys involved have confirmed specifics. Separately, a federal lawsuit challenging the legislation that created Central Alabama Water, Woodfin, et al. v. Ivey, et al., was dismissed without prejudice by U.S. District Judge Anna M. Manasco on October 15, 2026, according to a statement from Central Alabama Water.
