Nick Elwell Sutton: A claim of two halves?

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Sunderland football club
Sunderland football club

The recent claim by a former director of Sunderland Football Club was reported in the press before Christmas, principally in relation to a lewd Christmas card he had sent from his work email but this was a wrongful dismissal claim that also involved a number of allegations of breaches of confidentiality.

 What happened in this case?

In 2011, Mr Farnan entered into a Service Agreement and began employment with the football club as their Marketing Director. In May 2013, the club trawled through his email account and subsequently suspended him for gross misconduct. In the disciplinary proceedings, the club raised 28 allegations of misconduct, most of which related to breaches of confidentiality.

After he was dismissed for gross misconduct without notice, Mr Farnan brought a claim for damages for wrongful dismissal. Shortly before the trial, the club added the allegation that Mr Farnan had sent an offensive image, a lewd Christmas card, from his work email.

What did the court decide?

The claim was dismissed.

Dismissal without notice for breaches of confidentiality

An employer is entitled to dismiss an employee without notice if they are in repudiatory breach of their contract. In most cases, gross misconduct will be a repudiatory breach.

The court concluded that Mr Farnan had committed serious and repeated breaches of the express confidentiality obligations in his Service Agreement, so the club was entitled to summarily dismiss him without paying his notice period.

Emailing confidential information to home email

Although the court accepted that a number of the emails Mr Farnan forwarded to his wife were work related (they were sent for administrative support) and these were not in breach of his Service Agreement, some emails did not fall into that category.

The court found that he also sent emails with confidential information about sponsorship bids to his wife’s email address so that he could keep these as evidence in case he ever needed them in future litigation with the club. The court noted that the possibility of future litigation with an employer does not justify an employee keeping confidential documents. Mr Farnan was not authorised to do this and the court concluded that this was a serious breach of his Service Agreement.

The court rejected the argument that the emails Mr Farnan sent to business contacts attaching the club’s confidential information could be justified as part of his right to plan for his future while he was still employed by the club and concluded this was a serious breach of his Service Agreement.

Sending lewd emails from work

The court also ruled that the club was not justified in treating as gross misconduct the fact that Mr Farnan had emailed a Christmas card showing bare breasted women wearing Santa hats, with the words “Breast wishes for Christmas“. This was because the card could not reasonably be characterised as indecent or obscene and the club was not justified in taking this position because there had been similar incidents previously where the club had shown a tolerant attitude towards inappropriate communications by senior employees, including an email sent by another director, also from his work email address, to Mr Farnan’s wife, wishing her Happy birthday all the breast.

 Implications for employers

When defending a wrongful dismissal claim, employers can rely on facts they discovered after the dismissal. This option is particularly useful for employers in the context of senior employees who are highly paid and have a long notice period, as the employee’s damages in a wrongful dismissal claim could be very significant.

The court emphasised how the situation with the lewd email was very different from an earlier decision in 2015 involving Leeds United Football Club. In that case, it was decided that the employer was entitled to dismiss an employee who was already on notice of redundancy when it discovered that a number of years previously he had forwarded a pornographic email to a junior colleague. However, those images were markedly more obscene and offensive than the Christmas card email Mr Farnan sent.

In that case, the employee’s conduct, forwarding an offensive email to a junior female employee and two friends outside the football club, was a breach of the implied term of mutual trust and confidence. His conduct was likely to seriously damage the relationship of trust and confidence between him and the club and was sufficiently serious to amount to a repudiatory breach. In reaching its decision, the circumstances the court took into account in particular were:

  • the employee held a very senior management position
  • the images were pornographic and capable of causing offence
  • the images were sent by a senior manager who had significant influence over the career of the junior female employee he sent it to, and the images could have caused offence and left the club vulnerable to a harassment claim.

The other issue which the court highlighted in the case against Sunderland was that the club had not been consistent in their treatment of misconduct and disciplinary issues – it had previously shown a tolerant attitude to another employee in very similar circumstances.

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About Nick Elwell-Sutton

I am a partner in the employment practice group of Clyde & Co LLP. My work covers the full range of transactional, contentious and advisory aspects of employment law across a diverse range of clients. This includes financial services, industrials, business services, retail, transport and media and often across multiple jurisdictions. This comprises strategic advice and planning as well as operational execution and typically involves counselling senior management and at board level.

I am an occasional commentator on employment law matters in the press including on BBC Worldwide, Radio 4, The Times, Solicitors Journal and Insurance Day. I am a member of the Employment Lawyers' Association and International Bar Association and spoke at the IBA Dublin conference in 2011 on language discrimination in the workplace. In 2013 I spoke at the labour and employment conference of the New Jersey Association of Corporate Counsel. I also advised the Centre of Policy Studies on its submissions to the government on reform of employment law and wrote a chapter on the employment aspects for Outsourcing Legal Services: Impact on National Law Practices (Wolters Kluwer 2012) and recently undertook a short course of MBA essentials for lawyers.

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