Former VP Charges MeritDirect with Unlawful Dismissal
A former senior vice president at MeritDirect has filed an arbitration claim alleging that the list management-brokerage firm dismissed him without cause, is withholding compensation and has slandered his name.
The employee, Chad Slater, claims that he was unlawfully fired from the firm Oct. 7. He is seeking damages of $1.3 million in unpaid wages, $5 million for defamation and loss of future income as well as other relief, according to papers filed with the Stamford Superior Court in Stamford, CT.
Slater has also asked the court for an order to garnish MeritDirect’s assets, including its bank accounts, in the sum of $2.6 million pending the rendering of an award through arbitration.
Also named in the court documents are Ralph Drybrough, CEO and founder of MeritDirect in Stamford, and Mark Joyce, chairman.
MeritDirect denied the charges.
“Every allegation is emphatically denied and we will be responding very strongly,” Drybrough said.
Slater joined MeritDirect in February 2000, shortly after the firm began operations. He brought with him “several” existing clients from his previous job at Direct Media, a list management and brokerage firm based in Greenwich, CT, and invested $50,000 to help fund the new firm, the documents said. The clients include CDW, American Van, Northern Tool and Executive Greetings, sources said.
Lawrence Reilly, an attorney for Slater, declined comment.
Members of the limited liability company operated under a profit-center model which recognized that each client brought to the firm would remain the member’s personal client, the papers continue. Slater was also entitled to a percentage of the net proceeds of his profit center.
Slater alleges that his profit center was vastly outperforming the firm’s other profit centers and this year he was in discussions with other members including Drybrough and Joyce to modify and redefine his equity interest and his degree of influence within the firm.
The discussions included a number of scenarios. One was that Slater would buy out certain less productive members Another was that Slater would no longer be a member of the MeritDirect, take his book of clients and continue to work with the firm by paying a percentage of earnings for back- office support, the papers continue. The possibilities also included a complete buyout of Slater’s interests for $3.2 million to $3.5 million, a proposal that dropped in September to $1.5 million, the papers state.
On Oct. 7, Slater was sent a letter terminating his employment with MeritDirect and forbidding him to have contact with other MeritDirect members, employees or clients. Slater charges that he was unlawfully removed from his position.
Following the termination, some members of the firm began contacting Slater’s personal clients, defaming him and instructing clients not to conduct business with Slater, the filing alleges.
“They have collectively engaged in a campaign against Mr. Slater in order to poison Mr. Slater’s name and reputation among competitors, customers and other employees and members of [MeritDirect],” the papers read.
Once an arbitrator has been selected, a preliminary hearing will be held within 30 days.
