Rogers Communications CEO Joe Natale speaks to shareholders during the Rogers annual general meeting in Toronto on April 20, 2018.Nathan Denette/The Canadian Press
Rogers Communications Inc. RCI-B-T is countersuing its former chief executive officer, Joe Natale, arguing that he should return at least $15.4-million in severance payments after the company retroactively made his 2021 dismissal for cause.
The counterclaim is a response to a lawsuit from Mr. Natale, filed in court last month, seeking at least $24-million for wrongful dismissal and breach of contract, as well as “punitive, moral, and aggravated damages.”
Mr. Natale was replaced by the company’s former chief financial officer, Tony Staffieri, in November, 2021, during a conflict between opposing factions of the Rogers family and the company’s board. The dramatic power struggle resulted in chairman Edward Rogers replacing five of the telecom’s independent directors with his own slate of candidates, a move that was ultimately upheld by the B.C. Supreme Court.
In documents filed in court on Tuesday, Rogers alleges that during the dispute Mr. Natale pressed his subordinates into amending his employment terms without proper board approval, for instance to ensure that he would receive the same payments regardless of whether he was terminated on a with-cause or without-cause basis.
The amendments to Mr. Natale’s employment terms “were premised on an unlawful quid pro quo,” the company alleges, adding that his subordinates “approved these improvident arrangements at the same time that Natale unilaterally offered and approved generous amendments to their own employment agreements.”
The Toronto-based telecom alleges that Mr. Natale withheld a shareholder list Mr. Rogers needed in order to reconstitute the board until Mr. Natale had secured enhanced employment terms for himself and his subordinates, including chief human resources officer Jim Reid, chief legal and regulatory officer Lisa Damiani and chief communications officer Sevaun Palvetzian.
“Natale made these changes to encourage their support for his threat that the executive team would resign if he was terminated as CEO and to ensure that Damiani and Reid would assist Natale in securing his own self-enriching employment arrangements,” the company alleges.
The company says Mr. Reid, Ms. Damiani and Ms. Palvetzian, all of whom have since left Rogers, later renounced their entitlements under the amended employment agreements, and that only Mr. Natale is “seeking to have his unlawful agreements enforced.”
“Natale turned out to be a self-interested executive who resisted board oversight and refused to accept the authority of the Control Trust Chair,” the company’s filing says. (Mr. Rogers, in addition to serving as the chairman of the company, is also the chair of the Rogers Control Trust, which controls the telecom through its ownership of 97.5 per cent of the company’s voting Class A shares.)
One key factor in the dispute over the validity of the employment contracts is a debate about whether or not Robert Dépatie remained a director of the company when the changes were made.
The company argues that Mr. Dépatie was chair of Rogers’s human resources committee at the time, and that his signature was required. But John MacDonald, the company’s former lead director, said in an affidavit previously filed in court that Mr. Rogers told the board at a Sept. 22, 2021, meeting that Mr. Dépatie had resigned from the board because of a conflict of interest: He planned join the telecom’s management team.
Mr. Dépatie was named president and chief operating officer of the company’s home and business division in December, 2021.
Rogers says in a statement of defence filed Tuesday that Mr. Dépatie did not resign from the board in September, 2021. The company says his resignation was conditional on a leadership change that had not yet transpired, and that even if he had resigned – which he had not – the contracts would still be invalid because the human resources committee needed three members to be properly constituted.
The company also alleges that when Mr. Natale learned that certain board members supported replacing him with Mr. Staffieri, he directed Ms. Damiani and Mr. Reid to conduct an investigation into Mr. Staffieri. As part of that alleged investigation, the company says, corporate security monitored Mr. Staffieri’s communications by compiling copies of his e-mails, text messages, phone logs, Outlook calendar and Microsoft Teams history.
Bill Walker, a spokesperson for Mr. Natale, said in a statement that the former executive denies all of the allegations in the company’s counterclaim, none of which have been proven in court. He called them “completely without merit.”
“He is confident that the courts will see this tactic for what it is: a transparent attempt to avoid contractual liability and to further disparage Mr. Natale’s excellent reputation,” Mr. Walker said.
In his statement of claim, Mr. Natale argues that he excelled in his role, for instance by orchestrating Rogers’s $20-billion takeover of Shaw Communications. He says he was rated as outperforming the board’s expectations of him on all four of his annual performance reviews.
Mr. Natale claims that his employment terms were enhanced “amidst significant acrimony” between members of the company’s board to keep him in his role during a pivotal moment for the company, as it struggled with corporate governance issues and sought regulatory approval for its takeover of Shaw.
According to Mr. Natale, the telecom is now refusing to fulfill its contractual obligations to him, including a $4-million bonus payable on closing of the Shaw deal, which took place in April, 2023, as well as an additional $20-million that he says he was owed 30 days after closing. He is also seeking additional payments of undisclosed amounts tied to performance-related restricted stock units.
Mr. Natale is also seeking “punitive, moral, and aggravated damages,” which he says he is owed partly because Mr. Rogers and his wife Suzanne Rogers harmed his reputation by hiring the actor Brian Cox to create a disparaging video about him and then distributing it to various friends, family members and colleagues.
In the video, Mr. Cox, who portrays media mogul Logan Roy on HBO’s acclaimed television drama Succession, congratulates Mr. Rogers for his “real-life succession at Rogers Communications” and for ousting Mr. Natale.
Rogers, meanwhile, says there is “no basis for punitive, aggravated or moral damages” to be paid to Mr. Natale. Rather, the company says it is Mr. Natale who should pay “punitive and/or exemplary damages” of $1-million for his “high-handed and reprehensible conduct.”