LEBANON — Late last month, Headrest — a Lebanon-based nonprofit that serves residents in crisis or dealing with substance use disorders — announced in a news release it was closing two programs due to staffing challenges.

On Feb. 24, five employees were informed that they were being terminated and that the agency would close its 14-bed Low Intensity Residential Program and its Outpatient Services Program.

Headrest leadership said an inability to meet state requirements forced the nonprofit’s hand.

“The reason we made the decision currently to close is because the staffing has dropped to a point where we’re not able to meet our obligations as a 3.1 level facility,” said Matt McKenney, Headrest’s board chairman.

In New Hampshire, Level 3.1 residential treatment is a low-intensity residential service for behavioral health conditions. It includes a clinical component and, importantly, requires that staff be available 24-hour a day.

“The goal ... is to prepare clients to become self-sufficient in the community,” according to the state’s department of health and human services.

Meanwhile, as Headrest struggles, former employees have spoken out against the nonprofit’s management, contending a toxic work environment, fiscal missteps and ethical violations by its executive director have resulted in the organization’s decline and the departure of dozens of staffers.

McKenney declined to respond to these allegations and said in an email Headreast “would not comment on employment or personnel related matters.”

McKenney, however, noted that it’s been difficult to staff the residential program “since the pandemic.” He said that it’s “difficult to compete for talent” in the Upper Valley, and the turnover Headrest has experienced has been “in alignment with many other organizations.”

Headrest’s 988-crisis line will continue to be fully operational.

McKenney added, “We’re looking to address the circumstances of our organization as it relates to people’s tenure and turnover.”

Judith Caprio came to Headrest, located at at 14 Church St., in January 2023, replacing Cameron Ford, who led Headrest for five years before he died unexpectedly in 2022. Caprio previously worked for state governments in Rhode Island and Delaware.

In interviews and in resignation letters obtained by the Valley News, three former employees outlined their reasons for leaving.

After about four years as medical director at Headrest, Dr. Peter Mason resigned, effective Feb. 10, according to his letter of resignation.

He wrote that the “culture at Headrest has changed” since Caprio took over as executive director.

“Under Cameron Ford’s leadership, there was really a culture of healing, growth, mutual respect and collaboration among both the staff and the clients, and that changed radically with the change in administration,” Mason said in an interview. “The change in culture led to the resignation of key staff members, whom I respected as colleagues, and the elimination of some really key programs.”

In his resignation, Mason describes “a toxic environment that is characterized by chaos, a lack of transparency, and a lack of collaboration, both internal and external.”

He wrote that he personally has been marginalized despite having “over 40 years of experience as a family physician.” Caprio never sought his opinion nor was he consulted concerning the hiring of clinical personnel, in addition to being excluded from key meetings, Mason said.

“I also have concerns that without major changes, I will be putting my own license at risk … It is my hope that my resignation will provoke necessary changes in leadership,” he wrote.

Former development director Cheryl Avery sent an email to board member Jay Leiter on Feb. 3 obtained by the Valley News. The document includes a list of concerns compiled by multiple current and former employees.

“Headrest is being driven into the ground. We are a fraction of what we used to be,” according to the document.

The email said Caprio blamed overspending for financial issues, and is referred to as a “tyrant” among staff members — leading to a “horrible” staff morale, which has caused about 30 employees to leave since Caprio started her position two years ago.

“Judi has screaming fights with staff, all while 988 (the 24/7 crisis hotline) staff are on calls, others are in the building … The board (other than Matt and Jay) are unaware of the serious situation HR is in. They are not made aware of decisions being made real estate transactions, programs closing, financial matters,” as stated in the document.

Avery’s position was cut as a result of the closing of the residential program, with her last day being March 7, she said in an interview.

However, her position “didn’t have a direct role with the program, other than to raise money for overall organizational funds,” thus her salary was not paid by that program.

“I would question why my position was cut. I was told it was strategic, and I think it’s not strategic when you lay off your development director,” she added.

Moreover, Avery wrote, Caprio showed favoritism and didn’t follow standard hiring practices.

Because of its staffing issues, Headrest is at risk of losing its 988 grant, Bureau of Drug and Alcohol Services contract, and their 501c3 status, and $850,000 from the Health Resources & Services Administration, according to Avery’s letter.

One $1.5 million contract the Executive Council first approved in 2021, which was later extended through June 2025, “has been terminated because of the closure of (substance use disorder) service,” Jake Leon, a spokesman for the New Hampshire Department of Health and Human Services, wrote in a Monday email.

Headrest also receives state funding for its 988 crisis hotline. The Executive Council approved $2.66 million for the 988 service in a contract first approved in 2020, which was later extended through June of this year.

Headrest also receives funding through Medicaid, though that amount was not immediately available, Leon said.

As staff members reached out to McKenney with their concerns about the organization, Avery wrote that he would go “directly to Judi with the conversations and names.” Caprio would then confront staff during meetings.

On Feb. 16, Headrest’s former clinical director Ray Yanklowitz submitted his amended resignation letter, which was obtained by the Valley News.

“I have almost no doubt the Board does not care/wish to act but I will include them as I am the most ashamed of any Board member that sits by while this has happened,” he wrote.

He also outlined issues at Headrest, citing a “toxic work environment,” and alleged that employees were not allowed to work overtime even though there were just a few hourly employees. He also alleged “boundary and conflict of interest” issues and that at times medications were not being given out as prescribed and medications were destroyed outside of guidelines. In addition, he said he was concerned that Headrest may have been billing for more hours of treatment than patients were receiving.

“These are just a few issues that make it so toxic and unrealistic that there is no way Headrest can fulfill a 3.1 Residential program without the potential of far reaching harm to clients … This is a sad day when I am all about positive change and the only way I can look myself in the mirror is to give my resignation as it is crystal clear this is not Headrest, Inc. but it is Judi’s House to do as she may,” Yanklowitz wrote.

In an interview, Yanklowitz said that given the lack of staff, “There was no reason for Headrest to be open.”

“They were unable to fulfill their obligation to the client. … they would literally go three months at a time with no staff whatsoever, other than the executive director, myself and a third shift gentlemen who just watched the cameras,” he said.

And as a result of service shortfalls due to lack of staff, Yanklowitz said, “multiple relapses” have occurred among the population Headrest serves.

Caprio and the Headrest Board of Directors provided an email statement: “Headrest has been responsible for medication observation, and we continue to work with our partners to ensure accountability. Headrest will not comment on employment or personnel related matters … Headrest denies any claims of potential misappropriation of funds and/or billing inaccuracies. We continue to work with our partners to ensure accountability.”

In response to questions about the situation, Leon, the spokesman for DHHS, said in an email statement, “DHHS is working with Headrest to ensure that as it makes changes to its agency, people continue to receive substance misuse and crisis line services.”

Adriana James-Rodil can be reached at ajamesrodil@gmail.com.

CLARIFICATION: Headrest’s former clinical director Ray Yanklowitz said he was concerned that the Lebanon-based nonprofit may have been billing for more hours of treatment than patients were receiving. Headrest denied those allegations. A previous version of this story was unclear about the allegations Yanklowitz made about the organization's billing practices.