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  1. Wealth
July 26, 2016

On Elton John and the darker side of the employer-employee relationship

By Spear's

From Elton John’s sexual misconduct case to Nigella Lawson’s employee prosecution that detailed her drug abuse, Jennifer Agate points out how the ‘trusted employee’ could unleash a reputation nightmare for HNWs.

On 17 July The Sun on Sunday declared it had ‘won’ a legal fight against Elton John, with the embarrassing headline ‘Elton in secret sex case payout’. The singer had abandoned attempts to retain anonymity in the employment tribunal, with the result that the paper could report the fact that proceedings had been brought against him by a former employee.

The case, sadly not unique, exemplifies the reputational threats posed when relations with trusted employees break down.

The case concerned proceedings brought by a former hairdresser to the singer.  On his dismissal in 2015 he brought claims alleging unfair dismissal and unlawful sex discrimination, including sexual misconduct.  The allegations were strenuously denied and the case subsequently settled, with the claim being withdrawn.  Not, however, before the proceedings had come to the attention of The Sun.

Although the tribunal had initially refused to order reporting restrictions, the paper’s interest spurred the employment judge to make an interim order preventing Elton John from being named as the subject of the claim.  The paper, prevented from naming the parties involved, instead focused its story around the grant of anonymity.  After various to-ing and fro-ing in the courts the order was revoked and, after Elton John abandoned an appeal, the press became free to identify the singer.  He was now unmasked not only as the subject of the claim, but as the celebrity who had attempted to (in The Sun’s words) ‘gag’ the paper’s right to free speech.

Elton John is not the first celebrity to suffer this fate in an employment context.  In 2014, celebrity cook Annabel Karmel experienced a similar unmasking by the Daily Mail in a sexual harassment case also settled out of court. In both cases, the celebrities were left without the public vindication of a judgment in their favour, but instead, a hefty legal bill and some damage to their names.

In the Elton John case, the court insisted that the public ‘is to be trusted to understand that unproven allegations made and then withdrawn are no more than that’.  While this may be true (the ‘no smoke without fire’ brigade aside), no public figure would choose to be associated with proceedings, particularly where sexual allegations are involved. But are injunctions always the answer?  The global internet and, in particular, social media, means they are increasingly difficult to enforce, particularly for a client with an international reputation.

While injunctions will always have a place, there will be cases where a client may wish to allow reporting to proceed unfettered, instead relying on his communications team and the publicity of a (hopefully) positive outcome to redress any harm caused.  While the tabloids will typically report any particularly lurid allegations in detail and devote lesser space to the less salacious outcome, lawyers can take steps to ensure these publications update their articles, including correcting any inaccuracies, once a decision is known or, if appropriate, even during the hearing itself.  In cases such as Elton John and Anabel Karmel where the allegations were withdrawn before they could be tested in court, any suggestion of guilt will be defamatory and potentially actionable.

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The darker side of a breakdown of trust can be seen in the less common, but even more distressing cases that reach the criminal courts. Nigella Lawson discovered this to her cost when the prosecution of her personal assistants for fraud led to intimate details of her marriage to Charles Saatchi being discussed in court, including damaging revelations about her own drug use.

Some of the most distressing cases occur when a trusted employee threatens to deliberately compromise personal data in the form of a blackmail threat.  This can be overt (in which case consideration should be given to bringing in the police), or more subtle, in the form of a threat to bring unfounded employment proceedings, knowing that a high profile individual will not wish their laundry, clean or otherwise, to be washed in open court.

Ironically, although distressing, the presence of blackmail is a persuasive factor when seeking a civil injunction.  The courts recognise that allowing private information to become public would allow the blackmailer to achieve his aims and thereby defeat the public interest. In parallel criminal proceedings the anonymity of the blackmail victim will not be guaranteed by the Crown Prosecution Service, but the prosecution will usually seek protection for the victim (the witness in the case).

Even without any dispute, an employers’ private information can still be compromised by an unwitting employee.  The nanny’s naïve post that she is enjoying the sun on her employers’ yacht can give away the family’s location, alerting unwanted photographers. The personal assistant’s innocent Facebook jibe about her employers opens the door for public humiliation for both employer and employee.

Setting clear boundaries can assist, not only when it comes to legal proceedings, but in avoiding the unwitting breach. Confidentiality agreements impress on the employee the importance of maintaining the employer’s privacy.  Social media undertakings raise the awareness of the employee to this sensitive area.  All of course supported (ideally at least) by a solid relationship of trust.

However, when the mutual trust evaporates, the high profile employer has much to lose.  Innocent he or she may be, but that is not necessarily a defence to the smear a disgruntled former employee is capable of inflicting on them.  Pick your friends wisely; recruit your staff diligently and manage them well while they are with you.

Jennifer Agate is an associate at Farrer & Co LLP.

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