NBR employment case backfires: woman pays out 10 times what she is rewarded in compensation in legal fees

An Auckland woman who was unjustifiably dismissed by a former employer incurred more than 10 times in legal fees than what she received in compensation.

Philipa Johnson, who worked for business publication the National Business Review (NBR) as a senior advertising account manager and later partnerships executive, was found to have been unjustifiably dismissed by the Employment Relations Authority.

Johnson’s other claim of being unjustifiably disadvantaged by the NBR was dismissed by the authority.

She was also found to have breached her employment contract by taking and distributing sensitive company information – print subscriber and advertiser databases – from the NBR following her dismissal.

NBR’s publisher Fourth Estate Holdings took that case to the Auckland High Court, which ordered her “not to deal with, distribute or utilise” the information.

The ERA awarded Johnson $1666.67 in lost wages and $8000 in compensation from the publisher for humiliation, loss of dignity and injury to her feelings following her unjust dismissal. She originally sought $50,000.

However, she was ordered to pay a $9000 penalty for breaching her employment contract, of which $6750 was to be paid to the NBR and the balance to the authority.

Johnson paid legal fees of $96,000, outlined in the authority decision, which were said to have been footed by her father.

Employment lawyer Catherine Stewart, who defended Johnson through the High Court and ERA hearings, said she believed the $96,000 her client incurred in fees was reasonable.

“The costs Phillipa incurred were reasonable in the circumstances of this case. When assessing her costs it needs to be noted that a large part of the work done was defending her against claims brought by the NBR,” Stewart said.

“There were proceedings in the High Court and the Employment Relations Authority and an overlap in the Authority with the High Court proceedings. In the High Court Phillipa was being sued for damages and the NBR also brought a cross-challenge against her in the Authority. Fortunately we were able to successfully resolve the High Court proceedings thereby saving Phillipa the costs of a full hearing, as well as avoiding a potential award of damages against her.”

Employment lawyer, Peter Chemis of law firm Buddle Findlay, said the $96,000 sum incurred seemed “unusually high” and said it was an “exceptional case”.

“If you go to the High Court to get an injunction or defend it you might spend $10-$15-$20,000 on a bad day … I don’t know how she spent that much.

“The ERA hearing went for two days and then there was another half day; a case like that you might spend $30,000.”

Chemis said it was common for some to spend more in legal fees than what they got awarded in compensation when pursuing employment cases.

“I’ve never seen a case where someone spends $100,000.”

Stewart has not provided the Herald with a breakdown of costs.

The authority said the $96,000 in legal fees Johnson incurred included the NBR’s legal fees.

Johnson was employed with the NBR between May 2016 and October 2017, and tasked with increasing the publication’s advertising revenue.

She told the ERA two options were presented to her: resign and receive three months’ pay or go through a performance management process which would result in her employment terminated.

She was later given a termination letter, and told colleagues she had been fired.

NBR publisher Todd Scott held two meetings with NBR staff. During the second he told staff Johnson had been sacked and “deserved to be fired”.

Authority member Jenni-Maree Trotman ruled Johnson was treated unfairly and NBR’s decision to terminate Johnson’s employment did not fall within the range of what a “notional fair and reasonable employer”.

“There was no investigation of any performance concerns before dismissal. There was no rising of any concerns with Mrs Johnson before her dismissal and she was not provided with access to any relevant information relied upon by the NBR in making its decision. There was no opportunity afforded to Mrs Johnson to respond to any concerns about her performance before dismissal,” Trotman said.

Johnson said she felt intimidated and distressed by the actions taken by the NBR after her dismissal, including it pursuing the action in the High Court and threatening action against her for recording the dismissal meeting and through a text sent to her by Scott.

“Mrs Johnson has suffered humiliation, loss of dignity and injury to her feelings following her termination. However, I am not satisfied that the sum she claims is warranted in the circumstances,” Trotman said.

“Secondly, at least in part, Mrs Johnson’s distress was attributable to the High Court proceeding and the NBR’s claim in the present case, where it took action against Mrs Johnson to protect its confidential information.”

Breach of contract

Johnson was found to have sent a number of emails from her work email to her personal email account with sensitive company information, such as subscription numbers, a copy of the NBR’s print subscriber database.

Within days of starting her new job, Johnson compiled a spreadsheet containing information she had obtained from the NBR’s databases.

The NBR alleged Johnson breached her independent employment agreement by taking the confidential information belonging to the publication.

“During the latter part of her employment Mrs Johnson emailed information to her home address on multiple occasions and took hard copies of not only her own, but her colleagues’ client lists. This was done at a time when Mrs Johnson was aware that her job was in jeopardy and was actively seeking alternative employment,” Trotman said.

“It is more likely than not that Mrs Johnson took the NBR’s information for the purpose of using it in the future.”

In a statement to the Herald Johnson said she was considering appealing the authority decision.

“I’m pleased that I won the unjustified dismissal case and that the Authority found there to be serious defects in the process followed by the NBR and that I was treated unfairly.
“I was never in this for the money. For me it was extremely important as a matter of principle to stand up to the NBR because I believed they were breaking the law by giving me an ultimatum to leave with a pay-out or be fired,” Johnson said.

“This is a practice used at the NBR to get rid of people … I wanted to stop this practice from happening to anyone else. I was aware all along the costs would be more than I got back.”

Scott said he was glad the case had been resolved and apologised to subscribers and clients whose data had been taken.

“Our safeguarding of this valuable data should have been more robust.”

NZ Herald


Auckland lawyer struck off for secretly dealing in client’s trust

An Auckland lawyer has been struck off the roll of barristers and solicitors for adversely dealing with his client’s trust funds without their knowledge.

The New Zealand Lawyers and Conveyancers Disciplinary Tribunal found Brian Robert Ellis guilty of misconduct.

He persistently failed to comply with his trust account reporting obligations, adversely dealt with his client’s trust funds without the client’s knowledge and deducted an unjustified fee from the funds, the tribunal found.

Ellis is appealing the striking off order.

In another matter in June, Ellis acted for a client when he had a conflict of interest. The tribunal censured and suspended him from practice for six months.

With the latest finding, Ellis has now had seven disciplinary findings against him.

The tribunal said it could not have confidence similar conduct would be avoided in the future and there was a risk of reoffending.

As well as striking Ellis off the roll, the tribunal required him to honour his agreement to pay $810 to his former client and to pay prosecution costs of $31,600.

“Trust accounting responsibilities are at the heart of relationship between lawyers and their clients,” New Zealand Law Society president Kathryn Beck said.

“Any adverse dealings by lawyers with funds which are held in trust for clients will always be treated extremely seriously.”

NZ Herald


Armed Offenders Squad storm Auckland street during search warrant execution

The Armed Offenders Squad is swarming around Southdown Lane in Penrose, Auckland, as police execute a search warrant.

At 1.39pm a witness said a woman had been arrested by police after four other people were arrested earlier.

The police helicopter is also hovering over the scene off Great South Rd, a witness said.

The Armed Offenders Squad has been aiming their guns what looks like an industrial building on the road, a witness said.

The road has been closed by emergency services.

Fire and Emergency New Zealand (FENZ) is now setting up a shower on the road, another witness said.

A FENZ command unit arroved on site around 1.30pm.

Another witness said earlier it appeared a man had been bitten by a police dog and was sitting bleeding under a tree.

Four people wearing handcuffs have been taken out of a building by police, he said.

Six police cars are in attendance, as well as St John.

A police spokeswoman confirmed the AOS was executing a search warrant.

“I was coming back to work when I noticed the road was closed and there were cops with guns,” a witness said.

At 12.46pm police appeared to be searching for another person, the witness said.

NZ Herald