Crew Clothing sues former CEO over £600,000 bonus

Crew Clothing is suing its former chief executive David Butler over claims he paid himself bonuses and other awards worth more than £622,000 that were never signed off. 

The British fashion brand has filed a lawsuit against Butler just 16 months after he stepped down as CEO following a failed buyout attempt, according to The Telegraph.

Crew Clothing has accused Butler of telling its Head of HR, Rupert Hay, that the company's owner, Menoshi "Michael" Shina, had agreed to pay him hundreds of thousands of pounds in salary increases, bonuses, holiday buy-backs and accommodation allowance rises.

It claimed there was no agreement for these extra remuneration and employment benefits, which were worth £622,560, and that it would "not have agreed" to them. The brand is seeking compensation.

The claims have been met with a rebuttal from Butler, who previously launched a wrongful dismissal case against Crew Clothing at an employment tribunal. It is said that the High Court action has paused the employment tribunal case.

In a response to the High Court, Butler’s lawyers were reported to have argued that he had received "verbal promises" from Shina over aspects like bonuses.

They said Shina chose not to discuss Butler’s terms of employment and instead acted through parties including Hay, who "discussed and negotiated" on Shina’s behalf.

In addition, on the holiday buy-back, the lawyers said Crew Clothing instituted a policy for non-furloughed staff during the pandemic to receive payment for unclaimed holiday allowance.

Butler has launched a counter-claim, seeking damages for his wrongful dismissal last April to compensate him for the salary and contractual benefits he would have received if he had been given 12 months’ notice.

In the High Court documents, Butler's lawyers detailed the run-up to his departure, revealing that he had sent Shina a message last April after a wine tasting event and dinner where he had "consumed a lot of alcohol", in which he said if his proposal was not acceptable "you can assume I resign with immediate effect".

The lawyers argued that Crew Clothing should have allowed a "reasonable period of time to elapse" before accepting the messages at face value and Butler was clear he had retracted them.

A spokesperson for Crew Clothing told The Telegraph: "The case in question is a live legal matter and is being dealt with accordingly. As such, we are unable to comment further."

A spokesman for David Butler said: "David Butler has provided a full defence including detailed evidence refuting these allegations and will continue to vigorously reject the claims made by Michael Shina."