A retailer known as “Middle England’s Ralph Lauren” is suing its former chief executive over claims he paid himself bonuses and other awards worth more than £622,000 that were never signed off.
Crew Clothing has filed a lawsuit against David Butler just 16 months after he stepped down as chief executive in the wake of a failed buyout attempt.
In legal filings seen by The Telegraph, Mr Butler has been accused of telling Crew Clothing’s head of HR, Rupert Hay, that the retailer’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.
Crew Clothing 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 retailer said it was seeking compensation.
The allegations have been met with a fierce rebuttal from Mr Butler, who previously launched a wrongful dismissal case against Crew Clothing at the employment tribunal. It is understood that the High Court action has paused the employment tribunal case, which was due to be heard imminently.
In a response to the High Court, Mr Butler’s lawyers argued that he had received “verbal promises” from Mr Shina over aspects such as bonuses.
They said Mr Shina chose not to discuss Mr Butler’s terms of employment and instead acted through parties including Mr Hay, who “discussed and negotiated” on Mr Shina’s behalf.
Meanwhile, on other aspects such as 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.
Mr 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.
It comes after Mr Butler’s abrupt departure from Crew Clothing last year, which followed a failed attempt by the top team to stage a management buyout. Other senior leaders also stepped down at the time, meaning Crew Clothing was left without some top team members for months.
In the High Court documents, lawyers for Mr Butler detailed the run-up to his departure, including his frustration over delays in buyout talks.
They claimed Mr Butler had sent Mr 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 Mr Butler was clear he had retracted them.
A spokesman for Crew Clothing said: “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.”
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