Legal Drama, Music Business

Breaking News: IROKO Fires CEO of IROKING Michael Ugwu for Alleged “Gross Misconduct” and Breach of Confidentiality and Non-Competition Agreements

Share

I have been receiving all kinds of information on the ongoing inner shenanigans of IROKO for a while now. But of late, the information I receive have taken a more detailed turn and ugly look for the company. The information also directly contradicts the statement now released by IROKO in justifying the recent firing of some of its employees. I anticipate sharing some of these allegations with you all, soon.

Let me make a few quick statements before discussing the basis of the firing of Michael Ugwu as CEO of IROKING (yet another story contradicted by the information I am receiving).

First, in observing, for the past few years, IROKO’s operations as shared by the CEO Jason Njoku, I have said and continue to say I have an issue with Jason Njoku’s operation of his company, at least what he has presented publicly, and think it is one of those out of control situations headed for a wreck, if things are not restructured ASAP. From growing way too fast, in my humble opinion, to unnecessary bragging and hostile statements thrown at insiders, competitors et al. it is a recipe for disaster.

Of course Jason Njoku has fought me every step of the way here on AML, but I have maintained my position and time has shown I have been right on the money with my predictions and concerns for the brand.

IROKO is now “restructuring,” closing office(s) . .  ., letting go of staff, finding mentors (at least Jason Njoku is) and I can’t believe Jason in a recent post on his blog now says he is wiling to give up the rest of the market share to only focus on Nigeria. You don’t say.

It’s a case of “slow down IROKO, you are moving too fast,” really, from my view.

Second, folks I believe that if IROKO continues on the path it is, three key things may happen: 1) Jason may very well be ousted from the very company he founded; 2) Jason and Bastian may have a terrible falling out; and 3) IROKOtv could end up bankrupt.

Objectively speaking, Njoku has been nothing short of:

1. Arrogant, condescending and downright rude to many in the music and entertainment industry, too many times to count right from the onset of (his and IROKO’s) entrant into the entertainment industry. All you have to do is google and see what Njoku has had to say over time;

2. Njoku has also threatened, without any real substantiation, to sue competitors for alleged infringement and completely fell face flat i.e. did not follow through on such promises. You don’t, as CEO of a company, make very strong accusations against competitors to bloggers and press saying your competitor is infringing on your copyrights, you will sue and then sit there and do nothing;

3. Njoku has bullied legitimate copyright music holders on distribution platforms such as You Tube, too many times to count. Worse, his platforms were carrying infringing materials of Nigerian artists, to name a few; and

4. Finally, Njoku’s action through his company of having some of our artists sign alleged exclusive global licensing agreements, given his very limited reach, have been highly questionable, at least to me.

Now, here we are and the morale of his staff, who are to help execute this great common sense vision of how Africans view entertainment content, is at an all time low; from all reports I have been receiving and the latest news to hit the press.

This, to me, is a reflection of leadership, not the employees, and demands that the leaders of IROKO, the founders, do a careful self-examination and nip the problem in the butt. It may also require attending a few leadership training programs or conferences in addition to seeking wise mentors, although what mentors say is to guide you, not make you lose your identity and the vision for your company.

A big eating of the humble pie right now is one way to go for IROKO, otherwise I predict a  crash so big and bad, really.

Having said the above, let’s look very quickly at the latest news involving some legal drama at IROKO.

1. IROKO fires CEO of IROKOing, Michael Ugwu. Why?
The allegation is that Ugwu was building a competing digital music platform while employed with IROKO.

2. Does IROKO have the right to fire Michael Based on his Alleged Action?
Yes. It is terrible to have employees who are building competing companies while working for you. They are stealing your trade secrets, among other highly confidential information, to set up their own. It is horrible and you shouldn’t, if the facts are true, sit and accommodate such a terrible act and betrayal of your trust.

Having said that, there are two sides to every story.

From a legal point of view, what exactly did the confidentiality and trade secret clauses in the agreements say, if any?

What about the Non-compete clause? What exactly did it say?

“Robust” (agreement as stated by IROKO) does not equal clear definitions of what terms mean.

This is important and germane to any litigation that may flow out of this case for wrongful termination, among other claims. The scope/definition of terms may have been so narrow and not spelt out that Ugwu began working on his own project thinking it was okay to do so, only to find out that IROKO feels he somehow competed with them. We don’t know but time will tell us what is really going on here.

Either way, this is a messy case and also especially sensitive because it has effectively tarnished Ugwu’s image as an untrustworthy employee and person, period. Would you respect someone like Ugwu if you knew this history and he knocked on your door seeking employment from you?

Would you want to work with him in any business dealings if you know this alleged fact? I doubt many would.

It is why I am a big fan of not throwing sensitive information like this to the press or blogger unless YOU ARE VERY SURE ABOUT THE ALLEGATIONS AND HAVE THE DOCUMENTS TO PROVE this because it can destroy and does destroy lives. Even with solid evidence? What is the exact purpose of sharing this information? A simple, “it did not work out” should have been more than enough.

IROKO gave a statement to the press. Was this necessary? If Ugwu decided to go to the press, then sure, bring the fight on. But, was it necessary for Jason and Bastian/IROKO to release a statement saying the CEO of your music arm of your company was fired for “gross misconduct” for allegedly competing with you?

You already know or should know that he cannot use you for referral, that’s for sure. Also, common sense should tell you that we are in legal territory so there is no need to open a legal can of worms, and attract unnecessary publicity that detracts from your core business goals.

Giving such a VERY strong statement to the press forces Michael Ugwu to do something to defend his reputation and ability to earn a living, in a day an age where information is viral and easily found on google. Even if he is indeed the alleged untrustworthy person that IROKO paints him out to be, it is very distracting to deal with this in the public eye.

As business owners, we hire and fire. We also understand that retaining good employees is probably one of the hardest things most entrepreneurs face. So, what’s new here? Why was it necessary to make this news?

There are competitors such as IBAKAtv who is doing a quiet but excellent job at focusing and many others out there focused on running their businesses. Why again isn’t IROKO focused on IROKO’s?

Really, the allegation from IROKO and Njoku’s perspective, better be rock solid true, otherwise, Ugwu should not waste time in filing a claim for:

a. Wrongful Termination
b. Breach of Employment Agreement
c. Defamation
d. Intentional Infliction of Emotional Distress
e. Negligent Infliction of Emotional Distress

and whatever claims, based on the facts is clear he has, including seeking punitive damages and attorney fees for this mess.

Again, even if you could point to some terms he allegedly violated, where words are concerned, especially “robust” legal agreements, anything is open for litigation, especially if his character is dragged through the mud the way it is being dragged right now. How terrible to be called a disloyal person trying to steal/compete with your employer’s business and have that news shared with the world?

3. What is a Confidentiality Agreement?
If you as a business owner do not want your employees to divulge sensitive information, it is your job to have a confidentiality agreement to that effect i.e. an agreement outlining the sensitivity of that information and that you do not want it divulged. However, your job does not stop there. You also need to make sure you define what “confidential” information is.

Often, a lot of employers will include terms such as “sensitive information,” “confidential information” “proprietary information” or “trade secret.” Well, what do those terms really mean?

Also, employers place these statements in a handbook. Well, your handbook is not a contract. Make sure your contract spells this out.

Finally, independent of saying do not disclose confidential information, This is where the room for litigation in a case like IROKO lies. How well do you define/spell out what is or is not confidential information? (Have you also set up policies and procedures in place to help your employees identify what confidential information is and limit access to it, among other measures?)

This is a sad turn of events for IROKO and how they handle this internal bleeding and low employee morale has a lot to do with the future health of the company. To a large extent, there is a lot of immaturity in the leadership position as reflected with the actions and statements of one of its CEO, Jason Njoku. This really needs to stop.

Further, to all including IROKO, anything your CEO says and does on social media and his/her blog can be used against you in a court of law. In situations like these, blogging about the firing of your employees is a bad idea, especially when the message and statements you blog about is allegedly different from what you tell/told them in person.

My lunch special is served. Catch you all later and do leave your comments. No personal attacks against Jason and co.please,  or any of your fellow commenters. I won’t publish it. Stay on point and stick with the issues.

Enlighten and elevate so we can all learn and grow as a community, and as a people.

Thanks.

Cheers,
Uduak

Nigerian music platform iROKING has fired chief executive officer (CEO) Michael Ugwu, citing “gross misconduct” and alleging Ugwu had launched his own digital music platform while in the company’s employment.

In an official statement, iROKING said Ugwu had breached the terms of his contract by setting up a company in competition with iROKING, and that a number of other members of staff had been dismissed on the same grounds.

“We can confirm that Michael Ugwu is no longer the CEO of iROKING and has left the company,” the statement said. “He was dismissed earlier this month with immediate effect for gross misconduct.

“It came to light that, whilst under contract and salary of iROKING, Michael Ugwu set up and launched his own digital music platform, in direct competition with iROKING. This is an unequivocal breach of the robust non-compete and confidentiality clause he signed when he joined the iROKO team.”

Though the company said it would not give any further details at this stage for legal reasons, it did confirm other members of staff have also been dismissed on the grounds of gross misconduct.

“Those who left the company have been given a generous six weeks’ severance pay, which is 50 per cent more than stated in their employee contracts,” the company said.

“This action, alongside the dismissal of Michael Ugwu, was taken by the iROKO Management team in order to protect the intellectual property and reputation of our online music platform, as well as our artists’ work.”

HUMAN IPO has the full story.

Business of Music North Africa Roundtable

Listen to the Latest AML Podcast Episodes

Share

Africa Music Law™

AFRICA MUSIC LAW™ (AML) is a pioneering music business and entertainment law blog and podcast show by Fashion and Entertainment Lawyer Ms. Uduak Oduok empowering the African artist and Africa's rapidly evolving entertainment industry through brilliant music business and entertainment law commentary and analysis, industry news, and exclusive interviews.

Credited for several firsts in the fashion and entertainment industry, Ms. Uduak is also a Partner and Co-Founder of Ebitu Law Group, P.C. where she handles her law firm’s intellectual property law, media, business, fashion, and entertainment law practice areas. She has litigated a wide variety of cases in California courts and handled a variety of entertainment deals for clients in the USA, Africa, and Asia.

Her work and contributions to the creative industry have been recognized by numerous organizations including the National Bar Association, The American University School of Law and featured in prestigious legal publications in the USA including ABA Journal and The California Lawyer Magazine. She is also an Adjunct Professor at the prestigious Academy of Arts University in San Francisco.
For legal representation inquiries, please email (uduak@ebitulawgrp.com). For blog related inquiries i.e. advertising, licensing, or guest interview requests, please email (africamusiclaw@gmail.com). Thank you for visiting Africa Music Law™.

You may also like...

Leave a Reply

Your email address will not be published. Required fields are marked *