Fired AlarmForce CEO wants $11.3 million in damages

Joel Matlin, forced out in July as president and CEO of the Toronto-based company he founded, has filed a lawsuit over his dismissal
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Wednesday, October 2, 2013

TORONTO—The recently ousted CEO of AlarmForce Industries is suing the company for more than $11.3 million, claiming he was wrongfully dismissed and suggesting age discrimination was a reason.

Joel Matlin, who founded AlarmForce 25 years ago, was abruptly fired in July after a unanimous vote by the company’s board. Matlin, 65, who previously told Security Systems News that his termination as CEO and president was the result of “a mutiny created by my CFO, Anthony Pizzonia,” filed a legal claim in Ontario’s Superior Court of Justice last week.

Pizzonia is now interim CEO and president of AlarmForce, based here, as the company searches for a replacement for Matlin. He provided SSN with a company statement saying: “The company intends to defend itself against the lawsuit and believes the allegations are erroneous, containing factual errors and inflammatory statements.”

The statement added that because the matter is now in court, “the company will have no further statement to make, unless and until a decision is reached by the court, or a settlement is reached prior to court proceedings.”

Matlin contends in his lawsuit that he was let go because of Pizzonia’s personal ambition and the fact that Matlin is now a senior citizen.

The lawsuit says that Pizzonia, “lobbied the Board of Directors to terminate Joel’s employment.” It asserts that Pizzonia, who has been with AlarmForce since 1992 and on the board since 2004, “was personally motivated at least in part by his own ambition to run AlarmForce and by the fact that Joel was 65 years old.”

Of the more than $11.3 million total in compensation sought, only $1.3 million is for what Matlin claims was his wrongful dismissal. He also is demanding $6,640 for unpaid vacation time. However, most of the money Matlin seeks from AlarmForce in the lawsuit—$10 million—is for punitive and aggravated damages for the company’s alleged violation of the Ontario Human Rights Code.

Matlin doesn’t spell out in his lawsuit how he alleges AlarmForce violated the code but repeated references to his age suggest he believes age discrimination was a factor in his losing his job.

Matlin, in an email interview, declined to answer questions from SSN on the specifics of the lawsuit, citing the advice of his lawyers.

The lawsuit, filed Sept. 24, details other information surrounding the dismissal, which it contends was done with “no cause.” It notes that AlarmForce, which went public on the Toronto Stock Exchange in 1992, was very healthy under Matlin, with current annual revenues of about $50 million and “market capitalization of approximately $118.6 million.” In the third quarter of this year, under Matlin’s management, gross quarterly revenues were $12.5 million, up 9.4 percent year over year. The company has no debt.

The filing says Matlin’s employment was based on renewable three-year terms and that he was in the middle of a renewal term due to end on Oct. 31, 2014 when he was fired July 23. His annual salary was $336,000 and was due to increase to $346,000 on Nov. 1 and then to $356,000 on Nov. 1, 2014.

The board fired him suddenly, about two weeks before Matlin was due to make a presentation to board members on a new company strategy. Matlin contends in the lawsuit that he was at first told he could stay for a few days and pack up. However, he claims, later that same day “he was accused of entering into unauthorized areas and forced to leave the premises without being given any time to collect any of his personal belongings.”

Matlin told SSN in an email communication: “I was thrown out in a very undignified fashion. In all of my years of dealing with staff I have never treated anyone in this manner so it was a shock to be treated so abusively. Anthony Pizzonia … was directly responsible for this unpleasant event.”

Matlin also claims in the lawsuit that the several of his family members lost their jobs “by virtue of their relationship” with him. They included his son, Adam Matlin, and his stepson, Robbie Stepak, Matlin said. In fact, he contends Pizzonia called the police in attempt to get Stepak off the premises, even though Matlin says the company’s human resource manager had given Stepak permission to be there.

Among other claims Matlin makes is that AlarmForce damaged his reputation in a press release announcing his termination because he says the release “implies some impropriety or blame” on his part.

At the time of his termination, AlarmForce issued a statement expressing gratitude to Matlin, saying: “The board and management of AlarmForce wish to thank Mr. Matlin for his dedicated years of service and numerous contributions.”

Matlin’s firing came a few weeks after AlarmForce’s board announced it had ended a year-long strategic review of the company in which a sale was considered. But the board said July 3 that the company wouldn’t be sold but grown instead.

Matlin also complains in his lawsuit that after he left, AlarmForce continued to run television and radio ads using his image without his permission and falsely stating he was CEO.

“After some time, [the company] then replaced the audio recording of Joel’s voice with another speaker, but continued to use Joel’s likeness in television commercials,’ the lawsuit contends. “At the time of this filing [of the lawsuit], the radio advertisements are still being aired.”

AlarmForce provides security alarm monitoring and related services to residential and commercial clients in Canada and some areas of the United States. The company also sells two-way voice alarm systems.

When asked his thoughts about the recent developments at the company he founded 25 years ago, Matlin told SSN: “I have always considered my staff more family than employees. I worry about their future. As for my former shareholders who have done very well during my tenure, I hope that they will continue to reap the same rewards in the years to come.”

Matlin previously told SSN he was planning a legal strategy, called a proxy vote, designed to replace the board members who fired him. Matlin resigned from his position on the board a week after he was fired. Reuters reported at the time of his termination that Matlin retained an 8 percent stake in the company.

Matlin has declined to comment further on his legal strategy.