The relevant facts
9 As mentioned above, Mr Joseph was employed under contracts of employment with both Parnell AU and Parnell US. The Australian contract, dated 1 February 2011, appointed him director and Chief Executive Officer of 11 companies in the Parnell group, including Parnell AU and Parnell Holdings, on a base annual salary of AUD500,000. One of the terms of that contract was that he agree to accept such offices in the Parnell group, or related companies in the Parnell group as from time to time may reasonably be required.
10 The US contract was made in February 2012. It appointed Mr Joseph director and Chief Executive Officer of the same companies listed in the Australian contract with the addition of three US companies including Parnell US. It replicated many, but not all, of the terms of the Australian contract. Pursuant to that contract Mr Joseph was seconded to work in Kansas City, Missouri from 1 February 2012 "until termination".
11 On 14 October 2017, a meeting was held of directors of Parnell Holdings in which a resolution was passed that Mr Joseph's employment be terminated and he be relieved of his position as director of all the company's subsidiaries. The same day, Dr Bell wrote to Mr Joseph notifying him that his employment was terminated pursuant to cl 18.1 of both the Australian contract and the US contract, giving him six months' notice as provided for in that clause and requiring him to work through his notice period.
12 On 18 December 2017, Dr Bell wrote again to Mr Joseph on behalf of Parnell AU and Parnell US summarily dismissing him. The relevant parts of the letter were set out in the primary judgment at [22]-[23]. The letter began:
Immediate termination of your employment
1. We refer to your employment by Parnell Corporate Services Pty Ltd (Parnell CS) [Parnell AU] pursuant to the written contract of employment dated 1 February 2011 (your Contract) and to your secondment to Parnell Corporate Services U.S. (Parnell CS US) [Parnell US] pursuant to the written agreement between you and Parnell CS US effective from 1 February 2012 (your US Contract).
2. This letter constitutes immediate notice of the termination of your employment pursuant to clause 18.3 of your Contract and your US Contract, on the basis that your conduct described in this letter constituted:
a. acts that may detrimentally affect the Parnell group companies; and
b. wilful and material breaches of your Contract and your US Contract.
3. This notice supersedes the notice of termination given to you on 14 October 2017 pursuant to clause 18.1 of your Contract and your US Contract. Your employment by Parnell CS and Parnell CS US ends effective immediately upon the giving of this notice.
13 Amongst many other things, the letter went on to refer to allegations made about Mr Joseph's conduct which was the subject of the US litigation and Mr Joseph's conduct in relation to some of that litigation. It also alleged that in a notice to shareholders Mr Joseph had disclosed confidential information and made a number of assertions which were false and misleading, imputed improper motives to Dr Bell and another director, were disparaging of the Board and "Parnell", and were likely to cause significant detriment to "Parnell". We take the references to "Parnell" to be references to the companies in the Parnell group.
14 The US proceedings were brought by two senior employees of Parnell US: Jennifer Lindsey and Jennifer Tymeson. Ms Lindsey was Vice-President of Global Marketing. Ms Tymeson occupied the position of Director of Marketing, Companion. The reference to "Companion" is a reference to a division within the operations of Parnell US focused on the treatment of companion animals. In order to understand the nature of those proceedings, it is necessary to trace some of the relevant history.
15 Ms Lindsey had been working for Parnell US for less than six months when, in December 2015, she attended Mr Joseph's office with her elderly and arthritic dog, Yogi. As had been arranged, Mr Joseph injected the dog with a drug manufactured by Parnell. After doing so (and without warning), he injected Ms Lindsey with the same syringe he had used to inject her dog.
16 In late January 2016, Parnell held its annual conference in Hawaii. On 28 January 2016, at a "gala dinner", attended by over 100 employees, Mr Joseph appeared on stage with the Chief Financial Officer and told the following lewd "joke":
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 then fucked Jeremy Tessier.
17 Many employees were offended. Ms Tymeson was very upset and complained. Mr Joseph apologised to both Ms Lindsey and Ms Tymeson. Both later instructed lawyers.
18 The day after the gala dinner, Mr Joseph issued a written apology to all staff for his "inappropriate" behaviour, acknowledging that "many many people" considered the "joke" to be "extremely inappropriate and insensitive" and that he had caused "an enormous amount of offence" to everyone in attendance at the dinner.
19 On 2 February 2016, Mr Joseph spoke to Nathan Orr, an American attorney, about the prospect of Ms Tymeson bringing legal proceedings.
20 On 3 February 2016, an anonymous email was sent by a "concerned employee" to Dr Bell and Parnell's independent directors entitled "Concerned for Parnell's success". The letter included the following complaints:
In order for Parnell to achieve the goals that will make the vision of the company a reality, it is imperative that this is a positive, passionate, hard-working, and comfortable place to be and work for everyone.
The events that are described below have already significantly impacted many employees, and the potential negative implications of these events on the viability and success of Parnell are immeasurable.
You may already be aware of these events. In the event that you are not, please review below and act upon as you see fit.
• On Wednesday evening (January 27, 2016) at the Gala event, Robert Joseph (CEO) did open the evening with an undeniably explicit and very offensive "joke" that named specific Parnell employees. It was crude, derogatory in nature, and shocking.
• On one evening during the meeting Robert Joseph (CEO) did assault (there is no other word-he impulsively jabbed a needle into individuals) employees with syringe that is meant to deliver medication. The victims of the assault were "stabbed" in succession, with the same needle. There is photographic evidence of the results of this (bruising).
Not only are future internal Parnell organizational events of concern, but planned customer events for this year cannot be jeopardized with the risk of such behaviors being repeated. Morale at Parnell has been significantly impacted by the events of last week and that is not acceptable.
Delivering this message in an anonymous fashion is not optimal. However, it is most prudent.
21 The following day Dr Bell and Mr Joseph had a telephone conversation about the subject-matter of the anonymous email in which Mr Joseph was asked about the stabbing allegation and in which he denied ever stabbing or injecting anyone.
22 On 5 February 2016, Mr Joseph emailed Mr Orr about the allegations in the anonymous email which he attributed to Ms Tymeson "directly or indirectly". Later that day, after discussions with Ms Tymeson's attorney, Mr Orr emailed Mr Joseph and Erika Vikor (Parnell US's Vice President of Commercial Development and Human Resources) informing them that Ms Tymeson had agreed to abandon any claims against the company and had decided to return to work. Mr Joseph replied:
Not a good outcome, we need to work out a way for her to move out of the company. This 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.
23 In the ensuing conversation, Mr Joseph explored with Mr Orr the possibility of offering Ms Tymeson a redundancy.
24 On 10 February 2016, Ms Tymeson's employment was terminated. She received a letter notifying her that Parnell US had decided to eliminate her position effective immediately and offering her a severance package or, if she did not accept the offer, four weeks' pay. She was informed that the decision to eliminate her position had been made "deliberately" and "over a period of several months" and that Parnell could provide "ample evidence and documentation" to demonstrate that the plan had been in place "for some time".
25 The same day, Mr Joseph had a conversation with Mr Orr in which he asked him: "What is the risk of her saying that the termination is in retaliation for her complaint?"
26 Precisely one week later, on 17 February 2016, Ms Tymeson filed with the US Equal Employment Opportunity Commission a Charge of Discrimination against Parnell US and Mr Joseph. By it, she complained that she was discriminated against on the basis of her sex when she was dismissed from her employment, that the environment in which she had worked was "sexually hostile", that nothing was done to address that environment despite complaints she had made about it, and that she was dismissed as a result of her complaints.
27 On 21 March 2016, Ms Lindsey resigned. Her resignation letter was in the following terms:
As a result of your recent assault with a syringe and your pattern of engaging in, and encouraging, crude and offensive sexual harassment, I am formally submitting my notice of resignation. I can no longer compromise my personal values and continue to work for Parnell. Be advised, that I will also immediately call the police if you make any additional effort to assault me with a syringe or any other object.
My resignation is prompted by repeated instances of grossly inappropriate, sexually offensive behavior by you, the CEO of Parnell, and your assault on me with a used syringe. For no reason and without warning you stabbed me in the left thigh with a used hypodermic syringe after you injected my dog with the same syringe contaminated with the experimental drug, Zydax. This criminal behavior was both shocking and frightening. Furthermore, as we are all aware, I am not the only employee of this company that you have stabbed with a syringe. These assaults have been witnessed by members of upper level management and ignored, rather than prosecuted to the fullest extent of the law. Your conduct is not only criminal, but sadistic and deranged.
I can no longer be a part of a company that tolerates and fosters sadistic and sexually inappropriate behavior without consequences. The environment at Parnell is negative, hostile, and sexually harassing to females. No reasonable person would, or should, be required to accept working on a daily basis under the condition that they must accept the very real risk of being assaulted and confronted with psychotic behavior from the Chief Executive Officer, and accept that they will have to endure offensive sexual behavior, videos, and comments. It has become clear that those are the conditions you, and the company, require me to accept and that these conditions are not going to change despite my complaints. For these reasons, I have no choice but to resign.
As context, you will recall that multiple acts of assault and sexual harassment occurred at the all-company conference in Hawaii. Following that conference, I had expected, based on our discussions, several discussions you had with other ELT members, and your email apology to the entire company, that changes would be made. I had further expected that you were going to be punished in some fashion and that management would institute changes and prompt remedial action. Your email apology to the entire company promised "to show tangible and material change and to take steps to ensure that nobody in this company thinks it is ok to offend their colleagues. I (you) will be thinking hard over the coming days as to the actions I (you) need to take to uphold our values and to represent you all as your CEO."
Rather than complying with your promises, within a week of your email, in conversation with me, you became steadfast in keeping Parnell a "polarizing culture" and would not engage in conversation about change or course correction. You used the paradigm of Parnell as an excuse for bad behavior and justification to offend, bully, assault and sexually harass. This was again personally offensive to me as I told you face to face, as well as through text communication, that your behavior was wrong, offensive to all employees, and in general, not fitting for a CEO of a business.
You attacked your employees with used syringes. You are dangerous and appear to embrace and promote a culture designed to intimidate and humiliate females. Assaulting me with a used syringe is really beyond the boundaries of civilized behavior. Furthermore, in my professional career I have never encountered a company where the CEO and other top level managers engaged in the production of pornographic videos as a means of humiliating and embarrassing females at the annual meetings. When the head of Human Resources is creating and presenting to employees a video simulating oral sex, it is clear things are not going to change.
It is impossible for me to continue to work with you as I truly fear for my physical safety. I am saddened that your behavior is approved of by the Board and members of upper level management. After I complained of the offensive behavior, you told me in no uncertain terms that I could accept the way things were or leave. Therefore in order to avoid further assaults and disgusting, crude sexual harassment, I am left with no choice but to hereby tender my resignation.
Although I am concerned that I will be retaliated against if I stay, I am willing to provide my six weeks' notice. Should you approach me, or any other employee with a syringe or any other object to be used to do physical harm, I will immediately call the police. I also must insist that you refrain from making sexual jokes, videos or advances while I am in the work place. Any act to withhold salary, bonuses or other benefits during these six weeks would be considered retaliatory. While I am in the workplace I would ask that you stay away from me.
28 On 13 April 2016, Ms Lindsey filed a Charge of Discrimination in the US Equal Opportunity Commission in which the details of the matters raised in her letter of resignation were fleshed out. The next day, she filed a petition against Mr Joseph in the Circuit Court of Jackson County, Missouri, by which she alleged that Mr Joseph had "engaged in a pattern and practice of offensive and dangerous physical assaults toward [her] and others". By that proceeding (Lindsey assault proceeding), she sought both compensatory and punitive damages against Mr Joseph.
29 On 19 April 2016, Ms Tymeson also filed a petition in the Circuit Court of Jackson County, Missouri (Tymeson proceeding). The Tymeson proceeding arose from the discrimination charge Ms Tymeson had earlier filed with the US Equal Employment Opportunity Commission referred to above at [26]. We interpolate that the earlier process appears to have been a formal precursor to the action that was commenced on 19 April 2016 although, for present purposes, nothing turns on that.
30 Ms Tymeson sued both Parnell US and Mr Joseph. Amongst other things, Ms Tymeson alleged that she was the victim of sexual discrimination in that she had been sexually harassed by Mr Joseph and that there was a failure "to make good faith efforts to establish and enforce policies to prevent unlawful discrimination against [the company's] employees". She claimed that Parnell US had retaliated against her for making complaints about the discrimination by terminating her employment. She also alleged that Mr Joseph was liable to her for negligent infliction of emotional distress as outlined in her Charge of Discrimination. She sought damages (both compensatory and punitive) for retaliatory action by the company and for negligent infliction of emotional distress by Mr Joseph. She requested a trial by jury on all causes of action.
31 On 12 January 2017, Ms Lindsey filed a complaint in the US District Court (District of Kansas) against Parnell US and two other Parnell companies. On 4 December 2017 (not 12 April, the date recorded in the principal judgment), that complaint was amended. The case (Lindsey discrimination proceeding) was described in the amended complaint as one "about Parnell's sexually-charged culture of gender discrimination and pervasive sexual harassment and its pattern and practice of creating a pervasive sexual and hostile working environment for women (like [Ms Lindsey]) and the retaliating against women (like [Ms Lindsey]) who oppose the discriminatory and sexually-charged environment that demeans women and encourages sexual behaviour and lowering the inhibitions of female employees". Some of the conduct the subject of the complaint was allegedly committed by Mr Joseph in the course of his employment. That conduct included the incident in which she was injected with a used syringe (see [15] above, hereafter the "stabbing incident"), the behaviour at the conference in Hawaii (above, [16]-[18], hereafter the "gala dinner incident"), and numerous other matters, which were described in some detail. It also captured the circumstances of the termination of Ms Tymeson's employment.
32 On 1 November 2017, Ms Tymeson's lawyers served a notice requiring Mr Joseph to attend their offices on 20 November 2017 to give a deposition in her case. On 16 November 2017, acting on Mr Joseph's instructions, Parnell's lawyers moved the Missouri Circuit Court for an immediate protective order to prevent Mr Joseph's deposition from proceeding. On 29 November 2017, Ms Tymeson's lawyers filed a motion for sanctions alleging that he had misled the court.
33 All three proceedings were referred to mediation. The mediation concerning the two proceedings commenced by Ms Lindsey took place on 16 May 2017. The mediator, Jay Daugherty, was a former Missouri Circuit Court judge. At the conclusion of the formal mediation session, the two proceedings remained unresolved; but the mediator later circulated a document incorporating a "mediator proposed settlement" proposal, which all sides ultimately accepted. Parnell US paid Ms Lindsey a total of USD295,000 in settlement of her two proceedings: USD225,000 for the Lindsey assault proceeding and USD70,000 for the Lindsey discrimination proceeding. It is necessary to explore in some detail the circumstances that led to those settlements.
34 On 5 December 2017, Parnell US received advice from its attorneys, Shook, Hardy and Bacon, concerning all three proceedings (5 December 2017 letter). Shook, Hardy and Bacon also represented Mr Joseph in what that letter described as a "joint representation arrangement". The (or a) purpose of the 5 December 2017 letter was to outline the nature of the proceedings that Ms Lindsey and Ms Tymeson had commenced, to identify procedural steps in each which in due course Parnell US and Mr Joseph would need to take, and to summarise the potential exposure to financial liability that each presented.
35 Insofar as the Tymeson proceeding was concerned, the 5 December 2017 letter identified the "[e]stimated exposure" as follows:
Estimated exposure: Tymeson may be able to recover back pay and front pay, but those amounts are not known at this point, as we have not yet conducted discovery into her post-Parnell employment circumstances. As to compensatory damages to account for claimed emotional harm, we estimate she may be able to recover in the range of $50,000 to $150,000. This case also has the potential for a meaningful award of punitive damages, but the range would best be gauged through a jury research or focus group exercise. Lastly, if Tymeson prevails at trial, her counsel will be able to recover their attorney's fees (likely in the $250,000 to $300,000 range).
It also estimated that "[a]nticipated defense expense through trial" would be "$225,000 to $275,000".
36 The letter offered equivalent estimates in respect of the two Lindsey proceedings. As to the Lindsey discrimination proceeding, it summarised the exposure of Parnell US as follows:
Estimated exposure: We believe Lindsey quickly secured employment following her resignation from Parnell, so her lost wage damages are likely to be modest (perhaps less than $25,000), though she does have other claims relating to monies allegedly owed under her employment agreement that could bring actual damages more in the range of $75,000. Between compensatory and punitive damages potential, we believe there will be a statutory cap at $50,000. As to attorney's fees, Lindsey's attorneys will be able to recover them if she prevails at trial. They are likely to be in the $250,000 to $300,000 range.
The "[a]nticipated expense through trial" was said to range from "$175,000 to $225,000".
37 As to Mr Joseph's "[e]stimated exposure" in the Lindsey assault proceeding, the 5 December 2017 letter recorded:
Estimated exposure: We believe Lindsey has very little in actual medical expense relating to the alleged incident, but perhaps may be awarded as much as $100,000 in emotional distress type damages. There is potential for a meaningful punitive damages award as well, if a jury were to find Lindsey sympathetic and believe Rob Joseph acted recklessly. We can better gauge this potential through conducting a jury research exercise. The potential for punitive damages will vary significantly depending upon the actual makeup of the jury hearing the case.
The "[a]nticipated expense through trial" for that matter was said to be "$150,000 to $200,000".
38 Nearly two weeks later, Mr Joseph's employment was summarily terminated. The proceedings that Ms Tymeson and Ms Lindsey had commenced against him and Parnell US continued. Shook, Hardy and Bacon continued to act in them for both Parnell US and Mr Joseph.
39 On 14 February 2018, one of that firm's employment litigation partners, William Martucci, sent an email to his clients about the two Lindsey proceedings. Attached thereto was an email that he had received earlier that day from Mr Daugherty containing the "mediator proposed settlement" terms upon which (or upon a close analogue of which) both of those proceedings would ultimately be resolved. It is convenient to set out in full the terms of Mr Martucci's email:
For your consideration, attached is an insightful update from the mediator concerning the Lindsey litigation resolution effort. This path for resolution merits serious consideration. It is our best pathway for resolution at this point in time, and would call this Lindsey litigation to close.
40 It is also convenient to set out in full the email of the same date from Mr Daugherty. It is not clear why he was prompted to send it some nine months after the initial mediation session but nothing turns on that. His email read as follows:
Thank you again for the opportunity of mediating this most interesting case. Each of you have done an outstanding job for your clients in this difficult lawsuit. Unfortunately, the matter did not settle at the mediation (Plaintiff at $478,000 and Defendant at $125,000), but post mediation discussions with counsel give me some hope that a Mediator Proposal might have a reasonable chance of being helpful. I think with significant uncertainty on the horizon and a trial upcoming in the Fall of 2018 that further incremental negotiation is not as productive at this point in time. However, I believe we still have an excellent opportunity to get this case resolved.
Of course, in preparation for the mediation and now in preparation for this mediator proposal, I spent considerable time evaluating the legal and factual positions of all the parties and considered the merits of both sides. As a Circuit Judge for over 20 years, I certainly understand how firm both sides can be in their respective positions, but to not get this case settled at this stage where the risk is so great would be unfortunate. Therefore, I am proposing a mediator proposed settlement which represents my effort to evaluate the case having considered your respective legal and factual positions. This mediator proposal is listed below. It is presented to both sides in the spirit of compromise and in an effort to finally resolve this case. Please remember when it comes to litigation that certainty is valuable, finality is valuable and I hope you will strongly consider the proposal listed below as a rational way to resolve this dispute short of the uncertainty inherent in litigation and appeals.
Therefore, in order to resolve this case, I propose the following settlement with these terms:
1. Defendant to pay to the Plaintiff $295,000, payable within 20 days of the signing of the formal settlement agreement and releases. Of the amount paid to the Plaintiff $225,000 will be allocated to the Missouri physical personal injury battery case and $70,000 for the Kansas case with only the net paid to the P after attorney fees and expenses being allocated as 60% W-2 and the remainder as emotional damages.
2. Parties agree to provide full mutual general release.
3. Dismissal with prejudice.
4. Defendant to pay the mediation fees.
5. Each side to pay their own court costs and attorney fees.
6. Plaintiff agrees to a nondisparagement clause.
7. Parties agree to a mutual confidentiality clause as to the terms but not as to the fact of the settlement.
8. Counsel will prepare complete settlement documents with normal and usual terms.
This blind mediator's proposal will remain open until February 20, 2018, at 4:00 p.m. central time. Each side will notify the mediator by email on or before that date and time as to the acceptance or rejection of this proposal. The other side will not be told of your respective decision unless the result is a settlement.
Thank you for your help in this matter. Feel free to call me if you have any questions about the proposal or any other related matter.
(Emphasis added.)
41 On 19 February 2018, Shook, Hardy and Bacon sent a letter to Parnell US and Mr Joseph. They advocated, amongst other things, for "serious consideration of [the] mediator's proposal" and expressed the view that the "joint interests" of Mr Joseph's and Parnell US were "best served by resolution at this time [through] acceptance by the parties of the mediator's proposal". They also made a number of significant observations:
Among the considerations that support this evaluation are finality, efficiency, expense, and respect for the mediator's experience and insights. As we have discussed on previous occasions, the mediator is concerned with resolution from a pragmatic, economic standpoint, as well as a sense of the direction and strength of the overall litigation. This sense of the direction and strength of the litigation often does not take into account the possibility of persuasive elements in a given case, such as credibility determinations and a full understanding of the factual context. In other words, we may have a view very different from the mediator in terms of the actual ability to outright win a case, but the mediator is focused, as we noted, on more pragmatic resolution considerations.
On balance, for a variety of reasons, we recommend resolving the Lindsey litigation at this point along the lines of the mediator's proposal. We wish to be very express about the understanding that we are only involved in the Lindsey litigation itself and advising on it. There may be other matters of disagreement that each of you have with each other that may have some impact on this matter, but we are not knowledgeable on those aspects and are not advising on them. Those are matters that are best evaluated by your individual counsel and cannot be effectively evaluated by us as your joint counsel in consideration of your joint interests. Our joint representation is focused on the Lindsey litigation and the resolution of it in a manner that we believe is most favorable to your joint interests.
…
…We are of the opinion that this resolution is favorable when one considers the overall Lindsey litigation expense and the advantage of finality.
(Original emphasis.)
42 It will be recalled that Parnell US had only recently summarily dismissed Mr Joseph. As the emphasised extracts suggest, the lawyers were apparently concerned that the interests of Parnell US and Mr Joseph might no longer be sufficiently aligned to permit their joint representation. Those concerns found expression later on in the correspondence:
If you do not wish to proceed with the mediator's proposal for resolution, then it is likely that your interests are not aligned for this purpose. In that regard, we note that Alan and Brad [the representatives of the corporate client, Parnell US] are in favor of accepting mediator Daugherty's proposal to resolve the Lindsey litigation. We realise at this point that Rob [Mr Joseph] has expressed reservations about this approach.
43 On 22 February 2018, Shook, Hardy and Bacon acted on those concerns and withdrew its "joint representation" of Parnell US and Mr Joseph. That withdrawal notwithstanding, the firm corresponded further with its then former clients on 24 February 2018. That letter recorded that it had been sent at Mr Joseph's request and appears to have followed from a discussion the previous day between Mr Joseph and representatives of the firm. Of present significance are the following two paragraphs:
The purpose of this letter is to assist in the transition with respect to the representation of Parnell and Rob by new counsel in the Lindsey litigation. Of course, in the transition, we have endeavoured to ensure that your respective interests are well represented. We thought Rob's suggestion of his approach to resolution was very helpful for all to know in this context. Rob notes that he, in his initial responses, did not say that he was opposed to settlement, but rather that he needed to look into certain aspects of it. It is encouraging that Parnell wishes to resolve this case consistent with the mediator's proposal, and it is encouraging that Rob now wants all to know that he wishes to resolve this case consistent with the mediator's proposal.
Again, we thank the three of you for the opportunity to work with you on behalf of Parnell and on behalf of Rob. Rob made this special request to us, and we thought it was appropriate to make this communication to you. We realize we are not effectively your counsel in the Lindsey litigation at this time, but if this letter facilitates communication, we think it is worthwhile.
(Emphasis added.)
44 Presumably with the assistance of new representation, Parnell US executed settlement terms with Ms Lindsey to resolve the two proceedings she had instituted. Those terms, which Ms Lindsey signed on 11 April 2018, were consistent with the terms that Mr Daugherty had proposed.
45 Later in 2018, a similar process ensued with respect to the Tymeson proceeding. It, too, was the subject of mediation, again before Mr Daugherty. It, too, did not initially resolve at the mediation session. As he had done in relation to the two Lindsey proceedings, Mr Daugherty circulated a "blind mediator's proposal" for settling the Tymeson proceeding. That proposal was contained in an email he sent to the parties' representatives, in the following terms:
Thank you again for the opportunity of mediating this most interesting case. All of you have done an outstanding job for your clients in this difficult lawsuit. Unfortunately, the matter did not settle through conventional incremental negotiations (Plaintiff at $260,000 and Defendants at $140,000), but I think with extensive discovery and depositions continuing and a trial in the future, that further incremental negotiation is not as productive at this point in time. However, I believe we still have an excellent opportunity to get this case resolved at this stage.
As a Circuit Judge for over 20 years and a mediator for 7 years, I certainly understand how firm both sides can be in their respective positions, but to not get this case settled at this stage where the risk is so great would be unfortunate. Of course, in preparation for the mediation, and now in preparation for this mediator proposal, not to mention conducting the mediation itself, I spent considerable time evaluating the legal and factual positions of all the parties and considered the evidence likely to be presented at trial. Taking those experiences into account, I am proposing a mediator number which represents my effort to evaluate the case having considered the likely evidence, the risks to both sides and your respective legal positions. This mediator proposal is listed below. It is presented to both sides in the spirit of compromise and in an effort to finally resolve this case. Please remember when it comes to litigation that certainty and finality are valuable and I hope you will strongly consider the proposal listed below as a rational way to resolve this dispute short of the uncertainty inherent in a trial.
In order to resolve this case, I propose the following settlement with these terms:
1. Defendant Parnell to pay to Plaintiff $180,000 all payable within 15 days after the execution of the releases. Of the net amount paid to the Plaintiff 25% to be W-2 and the rest 1099. A draft agreement to be provided to Plaintiff within one week from November 2, 2018.
2. The Plaintiff to provide a full general release of any and all claims with no admission of liability with Joseph included in addition to Parnell.
3. Dismissal of the lawsuit with prejudice within 5 days of Plaintiff's receipt of payment.
4. Mutual confidentiality as to the fact and terms of the settlement.
5. No reapply, no rehire, neutral reference.
6. Each side to pay their own court costs and attorney fees.
7. The Defendant Parnell to pay the mediation fees.
8. Counsel will prepare complete settlement documents with normal and usual terms.
This is a blind mediator's proposal which means the other side will not be told of your respective decision unless the result is a settlement. Counsel shall advise the mediator by email no later than Thursday Nov. 1, 2018, at 8:00 p.m. (U.S. Central time) of its acceptance or rejection of the mediator proposal.
Thank you for your help in this matter. Feel free to call me if you have any questions about the proposal or any other related matter.
(Emphasis added.)
46 That proposal was the subject of written advice given to Parnell US on 1 November 2018 by its new lawyers, Stinson Leonard Street. Again, it is convenient to set that correspondence out in full:
Alan/Brad -you may recall that the Lindsey case did not settle at mediation, but ultimately got resolved after the mediator ("Judge Jay") proposed a mediator's number that both parties accepted. Since the case did not resolve last night, but the parties were much closer, he has done that again.
His mediator's proposal is $180,000. I know that is more than you want to pay, but my best judgment is that it is a good settlement in this case. It is far less than you paid Lindsey and properly so, given the facts. Unfortunately, we are in a situation where - as you described it - the lax procedures in Overland Park in the Joseph era have left us with no documentation (other than Rob's after-the-fact letter) to prove that the elimination of Tymeson's position had already been decided by the time she complained of sexual harassment. In Judge Daugherty's opinion, and I agree, this is very problematic for us. Judge Daugherty's candid opinion to me last night was that even with testimony, the jury would think our story that we were already planning to eliminate her position "rings hollow" without any documentation to support it. Plus, former employees (even though we can portray them as disgruntled) will dispute our version of events. As I mentioned on our last call, the most unfortunate aspect of U.S. employment law is that even if the jury or judge awards Tymeson a small amount of money, you will be required to pay her attorneys' fees, which could run as much as $200,000 through trial. I know this is very unfair - but it is the system we have to work with.
Hopefully, if you are able to resolve this case, you will have closed a very painful chapter in Overland Park.
Judge Jay has given us until 8 p.m. tomorrow (noon on Friday for you) to accept or reject the mediator's proposal. We don't know if she will accept, but based on my conversations with him, I think he has a high degree of confidence that she will.
If you'd like to discuss, please let me know.
47 A few weeks later, the Tymeson proceeding was settled on written terms consistent with Mr Daugherty's proposal. Unlike with the two proceedings that Ms Lindsey had commenced, Mr Joseph was not involved in the settlement negotiations that culminated in the compromise of the Tymeson Proceeding. Indeed, by that point in time, he had already filed his originating application in this Court.
48 With that regrettably lengthy historical summary complete, attention can now turn to the present proceedings.