Amid poor ticket sales in 2016, Ottawa Senators owner Eugene Melnyk lashed out at his management team, leading to tumult and discord behind the scenes, a new lawsuit against the NHL club and Melnyk alleges.
Former Senators executive Peter O'Leary recently filed a $1.55-million lawsuit against the Senators and its owner, alleging his termination was in breach of his contract.
O'Leary's 23-page claim provides a rare glimpse inside the Senators' front office dynamics, revealing not only dysfunction but also alleged abusive behaviour by Melnyk.
Specifically, the claim alleges Melnyk "at times used profanity and levelled insults at executive team members, including constantly calling into question their competency. Mr. Melnyk sent abusive emails to the executive team and frequently threatened to dismiss them."
O'Leary was hired on Aug. 21, 2014 to be the Senators' chief marketing officer and vice-president of ticketing and was fired by Melnyk on Dec. 12, 2016, according to O'Leary's statement of claim.
Melnyk and his Capital Sports holdings group, represented by Toronto lawyer Laurie Jessome, have filed a notice to defend. Contacted by the Citizen on Thursday, Melnyk said via email, "We believe it is inappropriate to comment on litigation before the courts."
None of the allegations against Melnyk and the Senators has been tested in court.
O'Leary's lawyers allege that Melnyk started making life difficult for Ottawa's management team early in 2016, several months after the club owner underwent a liver transplant.
During O'Leary's tenure, he received strong performance reviews from then-club president Cyril Leeder.
"Peter is responsible for the largest mandate in the organization," Leeder wrote in a performance evaluation included in O'Leary's statement of claim. "He is able to properly prioritize the 'big rocks' and also deliver a high volume of output. He puts in many extra hours to ensure he is meeting deadlines, staying on top of issues and getting results required."
By August 2016, Melnyk had dismissed chief financial officer Ken Taylor and replaced him with Stephen Brooks. Unlike Taylor, who reported to Leeder, Brooks reported directly to Melnyk, thereby diminishing the authority of both Leeder and O'Leary, the lawsuit alleges.
O'Leary's contract terms included a base salary of $285,000 per year, with four-per-cent increases at financial year-end 2016 and 2017, along with bonus provisions, health benefits, two Senators season tickets, a car allowance and matching RRSP contribution, the statement of claim says.
O'Leary earned a $20,000 performance bonus for 2016, as approved by Leeder and Taylor, but Melnyk then allegedly advised Leeder not to pay staff bonuses. O'Leary says he was also owed, in the fall of 2016, $29,000 in vacation pay and an RRSP contribution of $24,519.35.
Around this time, Melnyk questioned O'Leary's performance and his job title, the lawsuit alleges.
"How and when did you get the title of Chief Marketing Officer?" Melnyk asks O'Leary in an email included in the statement of claim.
"Peter — all time lows under my watch. Start thinking you are OFF all other projects other than selling immediate tickets. Drop the CMO title – MARKETING??? Drop the 2017 stuff, how are you making us money??? I lose millions this way . . . you will force us to start laying off dozens of people the day after the season. . ."
Melnyk later suggested to O'Leary that the CMO title was something O'Leary "grabbed and chose to hang onto."
Leeder repeatedly came to O'Leary's defence, according to the claim, reminding Melnyk that O'Leary was hired as a CMO, a typical title for a senior marketing executive in the NHL.
When the Senators failed to sell out the 2016-17 home opener against the rival Toronto Maple Leafs (the announced attendance was 17,618), Melnyk was not happy. In an email exchange with O'Leary, Melynk said, "Peter — understand — we take this gravely serious. Not meeting your budgets are not an acceptable place to be. I hope you succeed — I really do . . ."
O'Leary claims it was difficult retaining and attracting staff when the hockey club reduced net pay and was late on bonus pay. He alleges the Senators made all departments reduce spending by 10 per cent, which led to personnel reductions, including janitors. As a result, "professional staff were required to clean offices and empty garbage bins."
With game attendance still sluggish, at a Nov. 11, 2016 board meeting, Melnyk said he wanted to fire O'Leary, the lawsuit alleges. Leeder intervened and cited an approval of O'Leary's work by the external consulting firm Cossette.
Nevertheless, following the board meeting Melnyk sent a memo to all club executives outlining O'Leary's new mandate — strictly ticket sales.
"The sales to date have been a dismal failure. The worst I have seen," Melnyk wrote, adding that a search would begin for a new CMO.
"The title will not apply to Peter O'Leary."
When O'Leary asked Melnyk, via email, to clarify his duties and responsibilities, Melnyk termed it "unprofessional and potentially insubordinate" to email the owner in such fashion, the lawsuit says.
On Nov. 29, Leeder advised O'Leary that his overdue bonus of $20,000 would be paid and apologized for the delay. His outstanding RRSP payments were also made.
A week later, on Dec. 5, Brooks sent O'Leary a letter saying the bonus was paid "in error" and would have to be returned. When O'Leary questioned why he would not be entitled to his bonus, he was allegedly cut off from the company network, including access to work email and cell phone. His name was removed from the company directory.
At this point, O'Leary's lawyers intervened, suggesting the recent actions by the hockey club were tantamount to constructive dismissal. The club restored his computer access, but Brooks again requested repayment of the $20,000 bonus, according to the court claim.
On Dec. 8, Melnyk sent an email to O'Leary demanding the bonus money back by 5 p.m. the next day, otherwise the club would have "no choice but to terminate employment for cause."
O'Leary was fired on Dec. 12, according to the statement of claim. Melnyk signed the termination letter, calling O'Leary "dishonest" and his performance "dismal," citing absenteeism and a failure to co-operate with outside consultants.
Ultimately, Melnyk would fire the entire executive leadership group, including Leeder and broadcast VP Jim Steel, both original Senators staffers; general counsel Wendy Kelly and director of human resources Sandi Horner. Taylor had already been dismissed.
Further legal action is pending from ousted managers seeking severance.
In summation, O'Leary's lawyers allege Melnyk acted in "bad faith in an unfair and insensitive manner in the course of terminating Mr. O'Leary.
"Mr. O'Leary pleads that the Ottawa Senators actions in this matter are of such a reprehensible nature that damages should deter the Senators from any such future conduct."
O'Leary filed his claim in the Ontario Superior Court of Justice and is seeking:
• $650,000 in breach of contract payment for failure to pay O'Leary's base salary in lieu of 24 months notice of termination.
• Breach of contract for failure to pay $200,000 in bonuses (in lieu of 24 months notice).
• Payment for breach of employee benefits (amount to be determined prior to trial).
• $200,000 in damages for breach of faith and fair dealing in the manner of dismissal.
• Punitive and exemplary damages to the sum of $500,000.
Represented by Ottawa lawyers Janice Payne and Jim Anstey, O'Leary also seeks court costs.
Entertainment Plaza - TV, Movies, Sports, Music, Soaps
http://almosthuman99.com
Babe Of The Month - Vote Now!
http://almosthuman99.com/polls/babes/babeofthemonth.html
Hunk Of The Month - Vote Now!
http://almosthuman99.com/polls/hunks/hunkofthemonth.html
No comments:
Post a Comment