The Gala Dinner & its aftermath
96 The final basis upon which the Respondents seek to justify the decision to summarily terminate the employment of Mr Joseph arises out of the combination of a number of related events, namely:
the comments he made at the Gala Dinner held in Hawaii in January 2016; and
the subsequent cessation of the employment of Ms Tymeson.
The Respondents maintain (inter alia) that:
Mr Joseph terminated the employment of Ms Tymeson contrary to legal advice which had been received.
97 In resisting the claims made in the Amended Cross-Claim, Mr Joseph in very summary form maintains that:
Ms Tymeson did not find the "joke offensive"; and
the cessation of Ms Tymeson's employment was brought about "for reasons of redundancy" as a result of the "restructure" of the marketing team.
Counsel on behalf of Mr Joseph repeatedly resisted the characterisation of the cessation of Ms Tymeson's employment as "termination". On his approach, there was a restructuring which brought about the abolition of her position.
98 Ms Tymeson commenced employment at Parnell US in November 2014. Her position was that of Director of Marketing, Companion. She did not return to work after the Gala Dinner held in Hawaii in January 2016.
99 On her account, the Gala Dinner was held for the purpose of presenting awards to those employees "who had performed well". Just before the presentation of awards, Ms Tymeson maintains that Mr Joseph said words to the following effect (without alteration):
"Jen Lindsey was walking her dog, Jen Tymeson, in the dog park. They came upon Jeremie Tessier who took some dog bones and organised them in a straight line. Jen Tymeson then took those dog bones and built a beautiful Eiffel Tower. Jen and Jen came upon Casey Mize, who gobbled up all the dog bones, and fucked Jen Tymeson and the fucked Jeremy Tessler."
Ms Tymeson was "deeply offended and shocked at being included by name in this inappropriate and offensive 'joke' told by Mr Joseph to the entire company, at an event purportedly intended to recognise employee successes".
100 Mr Joseph in his affidavit maintains that he "did make a joke at the gala dinner on 27 January 2016 to the effect of that set out at paragraph 26 of the Tymeson Affidavit".
101 If the evidence is paused at this stage, at least two things emerge:
it was common ground that words "to the effect" of that set forth by Ms Tymeson were in fact said; and
irrespective of whether or not what was said was intended to be a "joke", the words themselves were accepted by Mr Joseph during his cross-examination as not being amusing at all. Indeed, he could not satisfactorily explain what further words could have been added to the account which would make the comment amusing.
Even by itself, the opening remarks of Mr Joseph at the Gala Dinner would go a long way to establishing "misconduct" and a basis upon which his contract of employment could be summarily terminated. The words which were said were inherently unsavoury. The seriousness of the remarks is only reinforced when reference is made to:
the context in which the words were uttered - namely at a formal dinner attended by in excess of 100 employees; and
the position occupied by Mr Joseph - namely that of CEO.
Although it is readily accepted that a determination as to whether conduct is of a sufficiently serious character as to justify termination may give rise to difficult questions of fact, including an assessment as to the circumstances in which that conduct occurred (cf. Willis Australia Group Services Pty Ltd v Mitchell-Innes [2015] NSWCA 381 at [89] per Macfarlan JA), it is found as a question of fact that Mr Joseph's conduct at the Gala Dinner was a basis upon which his employment could be terminated.
102 Any hesitation in concluding that summary termination of Mr Joseph's position was soundly based is removed when consideration is given to Mr Joseph's further conduct leading up to the cessation of Ms Tymeson's employment.
103 In response to Mr Joseph's utterances at the Gala Dinner Ms Tymeson instructed her attorney, Mr Lewis Galloway. Mr Galloway contacted Mr Orr, the attorney at that point of time representing both Mr Joseph and Parnell.
104 At first, Mr Joseph gave Mr Orr instructions that his preference was for Ms Tymeson to leave the company but that she could return to work if she wanted to. So much is apparent from the following email forwarded by Mr Orr to Mr Joseph and Ms Vikor on Friday 5 February 2016:
… The short version of our discussion is that Jen has agreed to abandon any claims against the company. The longer version is that this came as a result of Lewis conveying to her the problems he saw with her claims, after talking with me. She has decided to return to work and plans to do so on Wednesday, though Lewis had told her she should return on Monday if she plans to return. Lewis said he spent a significant amount of time talking to her about the fact that she has to make a renewed commitment to the company and put this behind her, as she would expect the company to do.
Please let me know when you have a moment to talk, so I can further elaborate and answer any of your question in a phone call. Thanks.
…
105 Messrs Galloway and Orr had thus at that stage worked out an agreement whereby Ms Tymeson would abandon her claims and return to work, there being some exchange as to when that would take place. Mr Orr's email raised the following concerns expressed in a reply e-mail about half an hour later from Mr Joseph to Mr Orr and copied in to Ms Vikor:
Not a good outcome, we need to work out a way for her to move out of the company. The issue has raised some very significant concerns as to her integrity and motivations which goes all the way to the Board and relates also to her failings professionally last year.
Can we talk today.
Mr Orr responded as follows on the morning of Saturday 6 February 2016:
I can talk anytime between now and 4:30 this afternoon. Unfortunately, when you conveyed that you thought it was best that the parties go their separate ways - but certainly that you were not terminating her (which was wise, because that would have completely shifted the dynamic against you) - it left open the door for her return to the company. Frankly, largely on the strength of our retort to the lies she'd told counsel, I got the impression that Lewis told her she really didn't have a slam dunk case. And he gathered that in response to that, she figured she was probably better off just keeping her job.
But I agree with you that at this point, given the circumstances, it's not the optimal outcome. I think Lewis and I both thought it would have been best for there to have been some negotiated separation. Let me know when you want to talk. Thanks.
106 What follows from this exchange of emails is that Mr Joseph was instructing Mr Orr that he was "not terminating" Ms Tymeson and that the "door" was open "for her return to the company" but that he would prefer her to leave. As at 5 February 2016 Mr Joseph was foreshadowing that they need to "work out a way for her to move out of the company".
107 Mr Joseph then drafted a letter which was settled by Mr Orr or someone else in the office of Spencer Fane, the firm of attorneys of which Mr Orr was a partner. The letter as finally settled was undated and forwarded to Ms Tymeson in mid-February 2016. Whether the letter is to be properly characterised as a letter of termination or as a letter which eliminated the position of Ms Tymeson can presently be left to one side. However it be characterised, the letter in its final form was as follows:
Dear Ms. Tymeson:
This letter is to notify you that Parnell Corporate Services U.S., Inc. ("Parnell") has decided to eliminate your position of Director Marketing - Companion, effective immediately. It is being sent in an effort to avoid any confusion or miscommunication about this decision, as well as to offer you the enclosed severance package. Because we know you are represented by counsel, we are delivering these materials to your counsel through our counsel.
As you know, when you joined Parnell in late 2014, we were seeking to build a marketing organization divided between Production Animal and Companion Animal divisions. At the same time, we began building and improving our digital technology capabilities. Unfortunately, the Companion Animal and Production Animal teams significantly underperformed in 2015. Therefore, the Board and senior executives-while developing Parnell's 2016 business plans-were charged with identifying the causes of this underperformance and recommending alternative structures and/or strategies.
It was determined that Parnell needed a more focused marketing strategy that would heavily depend on putting our digital technology assets at the forefront of all activities. Parnell could no longer rely on the traditional marketing approaches that have been used for years in the animal health industry.
Ultimately, Parnell identified three issues. First, the Digital Technology and Marketing Departments were not aligned. Second, the Digital Technology team was top-heavy in management and needed more senior developers who could produce enhanced functionality faster. Finally, the company lacked senior marketing talent in the Production Animal division. Parnell concluded that all three problems could be resolved through a restructuring of the Digital Technology and Marketing Departments.
As you know, Parnell has begun implementing these necessary changes. Parnell terminated its Chief Commercial Officer for lack of confidence from the Board that the referenced problems could or would be resolved by the incumbent. The company has also decided eliminate the Director of Digital Technology position. This will fund the addition of one new Senior Developer. To fund the second developer, the Board has decided Parnell needs to combine the Director of Companion Animal and Director of Production Animal positions into one, new Director or Marketing position. Doing so will not only fund the second developer, but will also a) ensure better alignment between the Digital Technology and Marketing departments ; b) ensure that digital technology assets are at the forefront of marketing strategies; and c) address the lack of Production Animal marketing talent.
In assessing candidates for this new Director of Marketing position, you were considered. However, your relative lack of experience at the company and exclusive exposure to Companion Animal marketing (at the exclusion of any Production Animal or Digital Technology experience) made other candidates more valuable for this new, expanded role. The company has chosen the incumbent Director of Digital Technology to fill the new Director of Marketing position.
The decision to eliminate your position was made deliberately and over a period of several months. Despite the arguments your counsel has shared with us, Parnell will be able to show ample evidence and documentation to establish that it has planned to eliminate your Marketing Director position for some time.
Nevertheless, in appreciation of your work at Parnell and in an attempt to part ways amicably, please see the following severance package. In exchange for signing a Severance and Release Agreement substantially similar to the one attached to this letter as Exhibit A, you will receive the following:
$70,942.31, which is calculated as follows:
$13,076.92 as payment for the four-week notice period, as provided in your Employment Agreement, which is attached to this letter as Exhibit B;
$38,250.00 for your annual and quarterly cash bonuses, which you would otherwise not be eligible to receive at this time;
$19,615.38 as additional severance equal to six weeks' salary.
Parnell will classify your departure as either a resignation or a position elimination, whichever you prefer.
Parnell will agree not to enforce Section 3(b)(ii) of your Confidentiality, Non-Competition and Assignment Agreement, attached to this letter as Exhibit C, and you may become employed at a competitive business without waiting for the six month non-compete period to expire. (However, please note that you will be expected to fully abide by all other terms and covenants contained in your Confidentiality, Non-Competition and Assignment Agreement.)
If you elect not to accept this severance package, Parnell will provide you only with the four weeks' notice of termination pay, per your Employment Agreement.
Please consider this offer. We hope you will accept it, and we wish you the very best in your future endeavors.
108 In respect to an earlier draft of the letter, albeit in a form very much the same as that ultimately sent, Mr Orr had expressed his views in the following email forwarded on 10 February 2016:
Rob and Erika, please see the attached edited version of the Rob letter. Let me know what you think.
Casey and Dave, a few questions:
• This is unorthodox, though I'm fine with the approach. But please let me know if you have any concerns about us having too much in the letter. Once this goes out, we are conceivably bound by the representations in it, so I don't want to unduly box ourselves in. Murray and I pared the original draft down some, but I believe further paring eliminates a lot of the substantive content of the letter.
• Do we want to throw a Confidential - For Settlement Purposes designation on the top of this, or do we, alternatively, like the idea of having this at our disposal for evidentiary purposes? Dave, mainly a question for you.
I'm looking at the draft severance agreement now and will send shortly.
The concern of Mr Orr was that he did not want to "unduly box [Parnell] in" - but he had been assured by Mr Joseph that what he was being told was factually correct. On that basis he was "fine with the approach". Upon being taken to this e-mail during his cross-examination and to the reference to "unorthodox", the following exchange occurred:
And you were fine with the approach, weren't you, Mr Orr, because that was consistent with your discussion with Mr Galloway to try and reach a negotiated separation? That's right?--No.
There was then an exchange as to whether Mr Orr was answering the questions posed by the cross-examiner and he continued his evidence as follows:
…The reference to what is unorthodox is it is highly unorthodox to include a cover letter with the transmission of a severance agreement. The reason for that is because it boxes the client in on a story before the lawsuit has even been filed. I say I'm fine with the approach because Mr Joseph had assured me that everything he included in his draft letter was factual and true and we need not worry about being boxed into that story. The approach has nothing to do with the fact that we are now transmitting a severance agreement. I disagreed, as you will see from the emails, vehemently with that course of action.
As to the absence of any e-mail recording Mr Joseph's instructions, Mr Orr gave the following reason:
Mr Orr, if you were not happy with the approach taken by Mr Joseph, can you show me in this email where you say that?--I don't believe I do say that in this email.
Yes. Thank you, Mr Orr?--I discussed it with him by - I discussed it with him by telephone.
Thank you, Mr Orr. If you had discussed something of that so much - I will withdraw and put it this way. If that was - you would agree with me that that's a quite important conversation that you would have had with Mr Joseph about the approach to be taken. That's correct?--I think that providing counsel to clients is important always.
And providing advice of that magnitude to a client, you would put that in an email, wouldn't you, Mr Orr?--No.
Or at least some form of written document?--No. My practice with Mr Joseph was to discuss the most important things by telephone or in person. Mr Joseph had a propensity for getting highly agitated in written communications with which he disagreed. I found that it was - I was more successful in getting him to try to take our advice when I spoke with him in person.
109 The e-mail forwarded by Mr Orr is consistent with the following e-mail forwarded on 11 February 2016 by Mr David Schatz, a partner of Spencer Fane, and copied in to Mr Orr (without alteration):
Sorry for the slow response, long day of depositions in Mississippi.
I've reviewed and I'm good with the letter---assuming the board (or other key execs) will testify consistent with the letter if deposed.
We're obviously staking our position early. (This letter essentially becomes our opening statement at trial.) If I'm Tymenson's attorney I would look for any way to drum up evidence contrary to the letter. If we're comfortable with that then I like it.
Mr Orr had requested the input of Mr Schatz in the settling of the then draft letter.
110 There is no doubting the conclusion that the American attorneys involved in providing advice to Parnell and Mr Joseph in respect to the letter to be forwarded to Ms Tymeson were constantly emphasising the imperative of ensuring that the facts supported the assertions being made in that letter.
111 The letter as finally sent to Ms Tymeson assumes some importance - it adds content to the reliance placed by the Respondents upon the Gala Dinner and the subsequent events as a basis for summarily terminating Mr Joseph's employment and it also casts further doubt upon the credibility of Mr Joseph.
112 The letter, it may be noted at the outset, is factually incorrect in at least one important respect.
113 Although the letter stated that there had been a "decision to terminate your position" and that that decision had been made "over a period of several months", the fact is that there had been no such decision. The importance of including that statement in the letter was (at least in part) presumably to convey the impression that the "decision" had been made well before the complaints being made by Ms Tymeson following the Gala Dinner.
114 But Mr Joseph was - perhaps not unexpectedly - reluctant to agree that no "decision" had been made. To do so would have been to both expose the inaccuracy in what he had been assuring Mr Orr was the position and to undermine any prospect of suggesting that the conduct now being pursued was due to a prior restructuring of the company and had nothing to do with the Gala Dinner. His reluctance is manifest in the following exchanges during his cross-examination:
Now, the reality is you wanted to get rid of her, didn't you? You wanted to terminate her employment?--As a result of her actions, where …
I just asked you a yes or no question?--Yes. We definitely wanted to get rid of her prior to that as well.
And there had been no decision prior to this point, had there, to make her redundant?--Yes, there had.
You say there had been a decision, do you?--That's right. Not a decision. There had [been] discussions.
There had been discussions about it?--Yes.
But there had been no decision, had there, to make her redundant?--There had been no decision on timing.
There had been no decision to make her redundant. Do you agree with that or not?--Yes, yes.
The matter was returned to the following day. Mr Joseph was taken to Mr Schatz's email on 11 February 2016 and Mr Schatz being "good with the letter … assuming the board … will testify consistent with the letter if deposed". Mr Joseph's cross-examination continued as follows:
And you understood when you received that email that that was at least, in part, a reference to there being a longstanding decision to make Ms Tymeson's role redundant; correct?--Correct.
And as we went through yesterday, there had been no such decision; correct?--No.
I'm sorry. Yesterday, you gave an answer on oath, didn't you, that there had been discussions about making her role redundant, but no decision had been made; correct?--That is correct. Yes.
Notwithstanding Mr Joseph having agreed that there was no "decision" to abolish Ms Tymeson's position but only "discussions", Mr Joseph continued to try and re-characterise those "discussions" as constituting a "decision".
115 Dr Bell's evidence supported the conclusion that no "decision" had been made. In his affidavit of 30 November 2018, he stated that "Mr Joseph did not discuss his decision to terminate Ms Tymeson with the board before he sent the termination letters." Dr Bell went on to further state that "[n]o formal decision was made by the board to terminate Ms Tymeson's employment, although… Ms Tymeson's termination was in line with the board's strategy at that time to reduce operating costs, and particularly the costs of the US Companion Animal team." However, in his affidavit of 16 August 2019 he clarified that he did "recall that on or about 3 February 2016 Mr Joseph did ring [Dr Bell] and raise his proposal to terminate Ms Tymeson…" but that he "did not adopt or endorse Mr Joseph's proposal to terminate Ms Tymeson and no final decision was made during that call".
In Dr Bell's cross-examination, he clearly reiterated that no "decision" was reached:
You had a conversation with Mr Joseph. And I think Mr McCarthy was involved on this conversation, 3 February 2016, in which Mr Joseph sought and was provided permission to terminate the employment of Ms Tymeson; that's right?-- My recollection of that conversation is that he was given carriage of the matter as CEO and the US based director.
And that's the best of your recollection of a discussion on 3 February 2016?--Yes. I believe the options were canvassed, but no decision was reached.
116 In addition to the exchanges between Mr Joseph and his cross-examiner exposing Mr Joseph again as a witness not prepared to fully and frankly disclose the facts as they were, as opposed to a witness who was committed to advancing only such an explanation of the facts as supported his case, the exchanges also exposed the fact that Mr Joseph was not fully and frankly setting forth the facts, even to those who were providing him with legal advice.
117 The fact is that there had been no decision at the time the letter was written to Ms Tymeson to make her position redundant - at best, there had been "discussions" about a possible restructure.
118 Notwithstanding that there had been no such decision of the nature communicated to Ms Tymeson in the letter, Mr Joseph was prepared to let Mr Orr proceed on an understanding of the facts known by Mr Joseph to be incorrect.
119 The letter is also important by reason of the deletion of parts of the letter from an earlier version which had been forwarded to Mr Orr (or those within his firm) for the purpose of their input. An earlier version of the letter as it had been presented to Mr Orr for the purpose of being settled had included the following proposed statements (without alteration):
The decision to eliminate your position was made deliberately and over a period of several weeks months. Despite the arguments your counsel has shared with us, Parnell will be able to show ample evidence and documentation to establish that it has planned to eliminate your Marketing Director position for some time. Given recent and significant concerns regarding your trustworthiness and honesty, Parnell believes it is appropriate to eliminate the position immediately, rather than several weeks from now, as was originally contemplated.
The deleted parts of that paragraph were deletions made by Mr Joseph. It will be noted that:
"weeks" became "months" - presumably an attempt on the part of Mr Joseph to convey to Ms Tymeson that the "decision" had been made well before her complaints; and
the references to "trustworthiness and honesty" were deleted.
The deletion of the references to "trustworthiness and honesty" in the draft letter forwarded to Mr Orr mirrored the concern expressed by Mr Joseph in his email on Friday 5 February 2016 when he referred to the "very significant concerns as to her integrity and motivations" which Mr Joseph was telling Mr Orr went "all the way to the Board". One of the matters being presented by Mr Joseph to Mr Orr for the purposes of the advice being given was that it was factually correct to assert that such concerns were in fact held. But when it came to including any reference to "trustworthiness and honesty" in the letter, Mr Joseph shrank from expressing any such concern to Ms Tymeson.
120 Another aspect of the letter is that it presented Ms Tymeson with a stark choice - she could either accept an offer of a "severance package" valued at US$70,942.31 or she could accept "four weeks' notice of termination pay". Yet Mr Joseph did not agree with the proposition that the letter provided Ms Tymeson with a choice - either accept what was said to be a generous offer or she would be left with four weeks' pay. His evidence during cross-examination was as follows:
…And, again, the first paragraph ... is in the same terms we saw previously; correct, namely this letter is to notify you that Parnell has decided to terminate your - eliminate your position of director marketing companion effective immediately; correct?--Yes.
And then you can see - before we get to the paragraph I took you to a few moments ago, you can see there is discussion about a process of restructure, and you say [in] … the paragraph immediately before the paragraph I took you to a while ago:
In assessing candidates for this new position, you were considered; however, you didn't get it.
Correct?--That's right.
So the effect of this letter is that Ms Tymeson was informed her position was gone and she had no position at the company; correct?--No. As I stated earlier, this was an attempt to settle the matter with Ms Tymeson.
Well, it may have been an attempt to settle, but it nevertheless immediately terminated her employment for redundancy, didn't it?--That was not the intention of why it was sent.
…
All right. And the next paragraph is the one that we've been through:
The decision to eliminate your position was made deliberately and over a period of several months.
Correct?--Yes.
And we've agreed, haven't we, that prior to this time, at least, no decision had been made to make her position redundant; correct?--No final decision had been made. That's correct. Yes.
And then the paragraph after that is:
Nevertheless, in appreciation of your work, you can accept this agreement.
The severance agreement. Correct?--Sorry. What's the question?
That the paragraph that follows is, in substance:
Nevertheless, in appreciation of your work at Parnell, we offer you this severance and release agreement, which you can accept, and if you do, you will receive -
a sum of money there stated?--That's what it says.
Correct?--Yes.
And if she didn't accept that severance package, you see down the bottom, second paragraph from the bottom:
Parnell will provide you with - only with the four weeks' notice of termination pay, per your employment agreement.
Correct?--That's what that says. Yes.
So this letter, which you signed, sets up a choice for Ms Tymeson, doesn't it? The choice is, "Accept our general offer, or you're gone. But either way, you're gone." Do you agree with that or not?--I don't agree with that.
The failure on the part of Mr Joseph to accept the obvious - namely that the mid-February 2016 letter was presenting Ms Tymeson with a choice to either accept the offer or not but either way "she was gone" - is yet further reason to question the reliability of Mr Joseph's evidence.
121 In respect to this exchange, the evidence of Mr Orr is accepted. The evidence of Mr Joseph is rejected and provides yet a further instance of Mr Joseph being prepared to - at the very least - mislead the lawyers giving him advice for the purposes of protecting his own position.
122 It was in April 2016 that Ms Tymeson commenced a proceeding in the Circuit Court of Jackson County, Missouri at Kansas City. It was in respect to this proceeding that Mr Joseph gave instructions to his counsel, for the purposes of providing an "assurance", that have been found to be misleading.
123 It is concluded that Mr Joseph engaged in serious misconduct in respect to:
the comments made by Mr Joseph at the Gala Dinner;
taken together with his conduct:
in resisting - if not opposing - Ms Tymeson's return to work as had been negotiated as between Messrs Galloway and Orr;
in misleading Mr Orr in relation to the drafting of the mid-February 2016 letter to Ms Tymeson; and
in drafting the letter to Ms Tymeson in a manner which was factually inaccurate and asserting that a decision had been made to abolish her position some months ago.
That combination of factors was conduct such as to warrant the summary termination of his services.