Former Rogers CEO Joe Natale alleges telecom violated ethics by altering board minutes

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Joe Natale, the former chief executive officer of Rogers Communications Inc., who was ousted in 2021 during a high-profile power struggle in the company’s upper ranks, says the telecom altered board meeting minutes in an “egregious violation of ethics.”

The allegation is contained in a response from Mr. Natale filed in court Thursday as part of a continuing legal dispute launched by the former CEO, in which he is seeking at least $24-million for wrongful dismissal and breach of contract.

One of the key issues in the legal battle is whether or not Robert Dépatie, the former chair of the Rogers board’s human resources committee, remained a director of the company when changes were made to Mr. Natale’s employment contracts.

The company has alleged in court filings that these changes were “unlawful, improvident, and intended to enrich Natale at the company’s expense,” while Mr. Natale argues that the new employment contracts were not substantially changed.

Rogers says the contracts are invalid partly because Mr. Dépatie, as human resources chair, would have had to approve the changes. The company claims that Mr. Dépatie was still on the board at the time and did not give that approval.

But Mr. Natale alleges that company chairman Edward Rogers announced Mr. Dépatie’s resignation from the board on Sept. 22, 2021. Mr. Dépatie was planning at the time to join the company’s management team, as head of its cable division, and would not have been able to hold both positions at once.

Mr. Natale argues that Mr. Rogers later backtracked, claiming that Mr. Dépatie had not resigned. The new filing says Mr. Rogers did this after realizing that Mr. Dépatie’s presence as a director would be advantageous to his position in a continuing legal conflict with the board over the company’s leadership.

“RCI has since altered the meeting minutes from September 2021 to support its false version of events, an egregious breach of integrity for a public company,” the document says.

The court filing also says that Mr. Rogers “previously filed different, contemporaneous versions of these meeting minutes in British Columbia Supreme Court in 2021, representing their accuracy to the Court at that time.”

Neither side’s allegations have been proven in court.

Rogers said in a statement that it is “confident the courts will discern fact from fiction, including inaccuracies about the company’s actions.”

“While we had hoped to deal with this matter privately, Joe Natale’s lawsuit has left us with no choice. His conduct during his time as CEO is described in our court filings and his behaviour speaks for itself,” Rogers spokesperson Sarah Schmidt said in a statement.

The dispute between Mr. Natale and Rogers is a rare instance of a former CEO and a high-profile, blue-chip company openly going to war and airing their grievances in public.

Mr. Natale claims he was stiffed out of millions of dollars and that Mr. Rogers and his wife tarnished his reputation by using the online talent booking service Cameo to hire Brian Cox – the actor who portrays media mogul Logan Roy on HBO’s acclaimed television series Succession – to create a disparaging video about him.

Rogers, meanwhile, argues that Mr. Natale was a “self-interested executive” who resisted board oversight and pressured his subordinates into amending his employment terms by sweetening their employment agreements, in what the company alleges amounted to an “unlawful quid pro quo.”

The legal battle between Mr. Natale and his former employer began in August, when the ex-chief executive sued Rogers. In its statement of defence and counterclaim, filed several weeks later, the Toronto-based telecom argued that Mr. Natale should return at least $15.4-million in severance payments, because the company retroactively made his 2021 dismissal for cause, after an independent investigation.

But Mr. Natale argues in court filings that the company did not have cause to fire him, and that the investigation was a “sham, a threat designed to intimidate Natale from enforcing his contractual rights.”

Mr. Natale was let go in November, 2021, after a weeks-long public battle between warring factions of the company’s board over the telecom’s leadership.

The conflict, which divided the Rogers family, broke out when Mr. Rogers first attempted to replace Mr. Natale with Tony Staffieri, the company’s chief financial officer, in September. The move met resistance from Mr. Rogers’s mother, Loretta Rogers, and two of his sisters, Melinda Rogers-Hixon and Martha Rogers, as well as a majority of the company’s board, who fought to retain Mr. Natale.

Mr. Natale says he first learned of a plan to replace him with Mr. Staffieri on Sept. 17, when he phoned Mr. Staffieri on what he describes in Thursday’s court filing as “routine business.”

“Staffieri answered the call and left the call open, presumably inadvertently,” the document says. As The Globe and Mail first reported in October, 2021, Mr. Natale says he overheard a conversation between Mr. Staffieri and the company’s former general counsel, David Miller.

Mr. Staffieri described a plan to make him CEO, replace most of the company’s management team and appoint Mr. Dépatie to lead a new cable division, according to Mr. Natale. (Mr. Dépatie did join the management team in December, 2021, as president and chief operating officer of the company’s home and business division. He has since announced his imminent retirement from that role.)

Mr. Natale alleges Mr. Staffieri also “unduly criticized and diminished” three of the company’s top executives at the time: chief human resources officer Jim Reid, general counsel Lisa Damiani and chief communications officer Sevaun Palvetzian.

According to Mr. Natale, several board members, including Ms. Rogers-Hixon, were concerned about the potential impact on the performance of these executives at a critical time for the company and decided to amend their employment agreements.

“Natale received absolutely no benefit from these amended agreements; there was no ‘quid pro quo’ as alleged,” he argues.

In the end, Mr. Rogers – who is the chair of the Rogers Control Trust, which owns 97.5 per cent of the telecom’s voting Class A shares, through which it steers the company – wound up replacing the five independent directors who had opposed him. He did so through a written resolution, and without holding a shareholder meeting.

Although the company, his mother and his two sisters challenged the legality of the move, it ultimately won the blessing of the B.C. Supreme Court. The new board later voted to fire Mr. Natale and give Mr. Staffieri the top job.