Creative differences: Ad exec awarded $300k in damages

A very public two-and-a-half-year stoush involving a prominent Australian advertising agency drew to a close this week, with the aggrieved executive creative director awarded almost $300,000 in damages.

It was a messy case, involving some terrible people management and misjudged communication. Senior managers at the ad agency were unhappy with their existing creative head, so they decided to bring in a new recruit with the

title of “national creative officer”. This proposed new role was essentially the same as that held by the executive creative director – who had been performing the role for seven years.

Making the situation worse, the management team at the ad agency declined to tell the executive creative director about the appointment – he found out via an industry news blog. Obviously, he was not happy to find out he was effectively being demoted. He sought clarification on how the new structure would work, then sought legal counsel and left the company a short time later.

The agency claimed the executive resigned, but the Supreme Court of NSW found instead that the appointment of a new creative head effectively repudiated the executive’s existing contract. The judge awarded the executive $262,500 for the nine-month notice period he would have been entitled to, plus long service leave. Legal costs are yet to be resolved.

The case focused closely on email exchanges between various senior personnel at the agency. It becomes clear in this email chain that the new recruit was being brought in so that the existing executive could be “exited”.

A key question in the case was whether the executive creative director’s role was a national one or state-based. The evidence overwhelming suggested that it was a national role already, and thus very similar to the national creative officer position that had been created.

For employers, there are some valuable lessons here. Firstly, communication is a necessary and important part of people management. This is particularly true where a new appointment or new role has a significant impact on an existing employee. Secondly, termination and redundancy must be carefully handled. Policies and legislation must be followed and employers need to be particularly mindful of documenting the process undertaken. As in the above case, it is important to remember that this documentary evidence works both ways and communications between senior executives may be used if an employee chooses to question the decision or how the process was carried out.

Lastly, if there is a performance issue with an employee, this needs to be properly addressed. Avoiding those difficult conversations could make things more painful for all concerned in the long run.