James Hedges, former chief executive officer of John Barrett Holdings LLC, filed a demand for arbitration with the American Arbitration Association Friday.
This story first appeared in the March 7, 2016 issue of WWD. Subscribe Today.
Hedges, who was fired by John Barrett on Feb. 9 in a manner which Hedges told WWD had a “public lynching mentality,” saying that 30 to 40 other people were present when Barrett allegedly told Hedges “I am terminating you for cause, suspected of fraud.” Hedges states $500,000 as the amount of the claim in the filing, and also seeks attorneys’ fees, interest, arbitration costs, punitive/exemplary relief and liquidated damages from Barrett, et al.
Hedges’ employment contract, signed Jan. 1, 2015, “irrevocably and unconditionally” waived the right to a trial by jury “in respect of any litigation directly or indirectly arising out of or relating to” Hedges’ contract.
Hedges’ lawyer, Gabriel Levinson of Tarter Krinsky & Drogin LLP, served Barrett personally, John Barrett Holdings LLC and John Barrett Salon with a letter advising of Hedges’ plans to file for arbitration and demanding a retraction of the “fraud” allegations and stating that Barrett and his employees and/or representatives “retained and converted Mr. Hedges’ personal property without justification…employee(s) and/or representative(s) of JBH or the Salon wrongfully accessed, downloaded, and/or transferred the confidential and proprietary information of Mr. Hedges and Hedges Projects LLC, without authorization, failed to return such information, and that they may have destroyed or deleted the computer files of Mr. Hedges and Hedges Projects.”
“On February 9, 2016, you wrongfully terminated Mr. Hedges and accused him of ‘fraud’ without specifying the acts,” Levinson’s letter read. “Your false accusation in front of over 25 people was intended to expose Mr. Hedges to public contempt and ridicule, and injure his professional reputation.”
The filed arbitration agreement asserted slander, defamation per se, breach of contract (amended and restated executive agreement), conversion and misappropriation, violation of wage and hour laws, and violation of 29 U.S.C. 1140 and ERISA 510 (interference with protected rights claims against Barrett, et al.)
It’s an ugly finish to a bold vision for reshaping the concept of a luxury salon and launching an ambitious expansion plan, including the opening of 15 Saks Fifth Avenue salons by the end of 2017 and 25 free-standing units within five years (one of the newly opened salons, in the Saks Fifth Avenue store in Boca Raton, Fla., has been closed, as has Barrett’s salon on Bond Street.)
Hedges, a minority investor in Barrett’s business, had been searching for additional capital to turn the Barrett business into a global luxury brand. Via a spokesperson, Rachel Whitmore, on Feb. 10, Barrett stated, “The funding for the expansion did not materialize as promised. As John has had a thriving salon business at Bergdorf Goodman for 20 years, he was confident it was in the best interest of the business for him to take back control to ensure future growth and success.”
The company had previously announced that it would open a new 16,000-square-foot flagship later this year at 10 East 56th Street in Manhattan, once the home of Elizabeth Taylor.
Hedges had also leased a 3,600-square-foot space at the Westfield World Trade Center shopping area for yet another salon — with 37 to 40 chairs — and retail space that had been slated to open in June. The fate of these two projects has not been revealed.