Stephens case: Seven used ‘carrot and stick’ to keep veteran programmer claims Ten
Network Ten has accused rival Seven of using a carrot and a stick to retain valued programmer John Stephens after he announced he would resign from the network to take a job with Ten.
A legal case bought by Ten against Seven over the veteran programmer heard Seven had threatened Stephens with legal action, and looked at offering him a job with Nine’s fledgling StreamCo venture, which it emerged the network has been collaborating on.
The NSW Supreme Court heard in the opening address from David Studdy SC, representing Network Ten, who revealed a series of emails sent by Seven executives after Stephens signed a contract with Ten.
“Seven had a two-pronged tactic to try to ensure that Stephens didn’t go to Ten. They had a stick to beat him up and threaten him to make him fear that he might be on the receiving end of litigation or whatever, and a carrot or a feather duster saying don’t worry we will look after you.”
Stephens had negotiated a contract with Ten CEO Hamish McLennan to work three days a week for the network, including one day at home, for a “huge” incentive on a two year contract starting June 9. Ten is now seeking to stop Stephens from working with Seven again.
At the time Stephens said he was employed by Seven as a consultant, working one day a week, and had no obligations under his contract other than a three or four month notice period, Studdy said.
Ten’s counsel disclosed a series of emails between Stephens, McClennan and Seven executives on his move arguing Seven executives convinced Stephens to stay with Seven after he informed them of his intention to resign and move to Ten.
When Stephens informed Seven CEO Tim Worner and Angus Ross, Seven’s director of programming who he reported to, in an email on March 6 Studdy said Seven CEO Tim Worner “frantically” called Stephens after he had first informed him of details of his contract with Ten and his intention to leave Seven. And this gave Stephens the impression the network may start legal proceedings against him taking the job at Ten, Studdy said.
Worner also sent an email to Stephens saying, “Stevo this is not what brothers do to one another, I refuse to believe you have done it.” Stephens also received an email from Bruce McWilliam, legal counsel for Seven, saying, “don’t accept”.
However Stephens replied: “Whoops… I accept you’re not accepting but may be too late.”
Studdy told the court: “We would certainly agree it was too late because he bound by his agreement with Ten at that point in time.”
As Seven executives discussed Stephens’ intended departure via email, Seven COO Nick Chan suggested offering Stephens a job at a new streaming company owned by channel Nine called Stream Co, working two days per week. In the email Chan also said: “Nine has as much of a vested interest in him not going as we do,” Studdy submitted, to which Worner replied: “Great idea.”
The following day, March 7, Ten published the news release that Stephens had joined the network. Stephens then asked McLennan for a contact number Ten’s programming boss Beverley McGarvey, and as he was provided with them that afternoon, he sent his official resignation letter to the HR department of Network Seven, offering his notice period in line with his contract.
An email from McWilliams to Stephens then set out the approach Studdy described as “two pronged”. In the email McWilliams brought up old controversies from when Stephens left channel Nine.
“You remember when you left Nine you were caught copying documents, and we don’t want to repeat that,” he said, and went on to seek footage from Nine CEO David Gyngell, according to email records.
McWilliams also said to Stephens in the email: “PS. If you feel you were taken advantage of when you were taking medication then please make that clear.”
A series of emails surrounding the contract negotiations that emerged as court documents were lodged, showed an exchange between Stephens and Ten CEO Hamish McLennan, the programmer suggested he had been under the influence of heavy painkillers and recovering from surgery when he accepted the job at Ten.
However, Ten maintains Stephens was “insightful” and “lucid” during his negotiations with McLennan.
And he had initially responded to McWilliams by saying: “I was under the influence of painkiller when I was in hospital but not yesterday when I signed with Ten, but I will keep it in mind,” Studdy submitted.
He added: “During this negotiation Stephens did not appear to be under the influence of any substance nor did he appear to have any cognitive impairment. His communication was well thought out and lucid.”
Further email exchanges included one with Seven West Media boss Kerry Stokes who said he was “pissed” at Stephens for leaving, and Worner later appealed to Stokes to convince Stephens to stay.
Worner also emailed Stephens about his resignation to say: “If you feel as though you have made a wrong call under durress we will assist you in doing so.”
The Seven CEO then visited Stephens with Ross for a “G-up chat” as Stephens admitted he was “leaning towards withdrawing” his resignation.
Worner offered Stephens a new role at Seven with a two year contract working three days a week, including one from home, as head of international development. Stephens then informed Seven he would withdraw his resignation and wished to continue employment.
On March 9 he drafted an email to McLennan, and then shared it with Worner and McWilliams. On March 10 he sent the email to McLennan, including changes from his original draft with Studdy said suggested Seven played a role in the draft of the email.
However McLennan was clear in his response that the agreement still stood and Ten would be pressing for performance.
The two day hearing before Justice James Stevenson opened at 10am and has been adjourned until 2pm.
Proceedings were lodged by Network Ten after Stephens, a veteran programmer with over 40 years’ experience, signed a contract to join Ten as director of scheduling and acquisitions in March, and then decided to stay with Seven where he has worked since 2003.
Ten CEO Hamish McLennan had said Stephens was a “critically important addition” as the network seeks to bounce back from some of its poorest ratings on record.
The network then filed legal action claiming Seven had interfered with Stephen’s new contract, however Seven maintains the programmer simply had a change of heart and was not thinking clearly when he accepted the job at Ten.
However Network Ten maintains Stephens remains under contract and will start in the role on June 9.
Ten obtained an interim injunction in March, preventing Seven from inducing Stephens to breach the contract. However that injunction, brought before Justice Paul Brereton in the NSW Supreme Court on March 17, was not extended, and Ten was ordered to pay Seven’s costs, as Stephens was granted permission to return to his work at Seven.
The judge also ordered an expedited hearing expected to be the start of a long dispute.
It follows another drawn-out legal stoush between the networks after Ten hired Seven’s James Warburton as CEO in 2011, and Seven took Ten to court to enforce a non-compete clause in Warburton’s contract.
Megan Reynolds
What a circus …and importantly a complete waste of time, resource and money.
I think Ten should be spending on programming not drawn out legal issues “that they cannot win” and will not gain anything !
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Something out of keystone cops!!!!!
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They will win. It’s just a matter of how much. I suspect Stephens is up for a lose lose.
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Wow Hampster – you obviously have a chip on your shoulder!
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