Ex-JLL CEO hits back with $14m lawsuit

The former chief executive of JLL has launched a legal action against his former employer after being sacked for purportedly mishandling alleged sexual misconduct in the firm’s Victorian branch.

Editor’s note: This story first appeared on HR Leader’s sister brand, REB.

Global commercial real estate firm JLL continues to be hit by legal proceedings, with its former chief executive now suing the company for $14 million, following his termination after two decades of service.

Dan Kernaghan, who was fired by the global head office in a phone call after two decades with the firm, alleged that the agency violated his workplace rights by terminating him over the handling of a complaint against one of his senior employees.

According to Federal Court documents, Kernaghan is seeking $14 million, including more than $6 million in lost earnings and bonus payments.

Kernaghan is now the fourth employee to sue JLL following a wave of dismissals around sexual harassment complaints and broader cultural issues.

Earlier this month, veteran agents Peter Blade and Greg Pike took the firm to court after being sacked and publicly blamed for misconduct before any investigation was completed.

Following this, former JLL regional HR head Julie Skinner announced her intention to sue the company, alleging she was terminated despite purportedly giving “appropriate” advice during the Victorian sexual harassment probe and being assured she wasn’t under investigation.

According to Kernaghan’s claim, his sacking relates to the handling of a separate alleged sexual misconduct in the firm’s Victorian branch, where a senior staff member allegedly demonstrated inappropriate behaviour towards a female colleague.

Following the claim, Kernaghan launched a probe against the head of the agency’s Victorian industrial and logistics unit, James Jorgensen, following the allegations of misconduct.

The probe concluded that only part of the allegations held merit, with court filings revealing that Jorgensen admitted to some misconduct while accusing the complainant of being dishonest.

Despite internal and external legal advice supporting termination or disciplinary action – and contrary to Skinner’s recommendation – Kernaghan allowed the senior staff to keep his job.

Kernaghan offered Jorgensen the option of termination or disciplinary measures, including demotion with a pay reduction, a ban on managing staff, and no contact with the female complainant, all of which the senior staff accepted.

Despite the internal resolution, a junior staff member in the Victorian branch alerted the global head office due to concerns raised by multiple staff members about the handling of the claim and the subsequent disciplinary actions taken against Jorgensen.

Following the concerns, JLL global chief executive Christian Ulbrich called Kernaghan to fire the senior staff member, who was then served termination over a phone call a week later, followed by an email.

“I write to advise you that your employment with Jones Lang LaSalle … is terminated with immediate effect,” the email said.

“You have breached your employment contract by failing to perform your duties in a timely and ethical manner and in keeping with JLL’s best interests and failing to provide full and prompt information to JLL regarding the conduct of JLL’s business, including any material issue within your knowledge affecting JLL.”

Kernaghan said his sacking has breached Australian employment law and deprived him of millions of dollars in compensation.

“[JLL] did not have a proper basis to find that [Kernaghan] had engaged in conduct warranting the summary termination of his employment,” according to the documents filed with the court.

“Had [JLL] determined, properly, that [Kernaghan] had not engaged in conduct warranting the summary termination of his employment, [Kernaghan] would have remained employed with [JLL] for at least five years.”

Following the sacking of Kernaghan, the global firm also appointed Luke Billiau, JLL’s current head of capital markets for Australia and New Zealand, as interim CEO while the company searches for a permanent replacement.

JLL has also been working to address an independent, unreleased report by law firm Clyde & Co, in a bid to repair its reputation.

“Our current focus is on supporting our people and rebuilding trust with our clients, partners, and stakeholders,” Billiau said.

“We are determined to uphold a safer and more accountable organisation for the long term. We know that trust must be earned, and this work will continue until meaningful change is embedded in everything we do.”