The final court decision has been issued in the case of Kevin Brittingham’s lawsuit against Freedom Group and Remington over his sudden firing a couple years back, and it’s a way better read than I expected. Not only is it a complete and total smackdown against Remington, but it was so entertaining that I found myself chuckling at times. The full test is available for download here, but for those who don’t want to wade through all 117 pages of brilliantly written legal analysis I’ll try to summarize . . .
Kevin Brittingham founded AAC, and his success was due in part to the culture that the company cultivated. They even went so far as to give silencers to people who had an AAC logo tattooed on their bodies, a marketing campaign that was so successful that they sunk a quarter million dollars into it before it ended. The company was debt free and making money hand over fist, so Kevin never saw a need to sell. But after a meeting with Jason Schauble (then working for Remington, recently fired from Tracking Point, and now working for SilencerCo), Kevin saw that Remington might be able to help them grow the business beyond what they could do on their own. Kevin wanted silencers to be mainstream, and getting Remington to start marketing silencers would be a major step forward.
The end result of the negotiations with Jason Schauble was that AAC would be a separate entity owned by Remington, but completely independent in operation. And in return, Remington would provide support with ATF compliance, record keeping, and give them access to Remington’s extensive distribution network. It was a sweet deal on its face, but it never had a chance.
To make the deal work, Remington would purchase AAC’s gear lock, stock, and barrel and transfer it to a new Remington-owned entity. This meant transferring all existing equipment to Remington’s possession, along with all of their silencers and R&D guns. But there was a problem. Since day one, Kevin had used his personal gun collection in the design and development of the company’s silencers. Kevin had gotten his start in the gun world by buying and selling machine guns back when the market was starting to take off, and as a result he had amassed an impressive collection of modern and antique guns. He had used these as tools to test new silencer designs, and since he owned the company he never saw the need to officially transfer the guns to AAC or buy replacements.
Realizing that AAC would not be able to function without using Kevin’s personal guns for R&D, the deal allowed time for those guns to remain on premises while the transfer was taking place. The idea was that Remington would either purchase those guns later or get some replacements, but in the meantime Kevin’s stash would remain in the shop and fuel the development of new products. Jason Schauble didn’t see this as problematic, so long as Kevin maintained proper “control and dominion” over the guns as per ATF regulations and federal law.
After the sale, things went south quickly. Technically as soon as the company was sold they needed to start operating under a new FFL, since they had only purchased the assets and not the business itself. But instead of ceasing operation until they had everything figured out under their own FFL, they continued using Kevin Brittingham’s personal and business FFLs and simply rubber stamping his name on the forms. Even after AAC had moved to the new Lawrenceville location and sold the old business, they continued operating as if the old FFL from that old building was valid. On the stand, Remington’s own ATF expert testified that the practice was indeed illegal
Kevin and the AAC guys saw what was happening and were understandably concerned. Despite Remington’s promise to send them support to handle the compliance issues, no help came. Kevin and others repeatedly asked when someone would be assigned to help, but years after the sale there was no permanent employee detailed to handle AAC’s books. In the meantime, AAC continued to use their pre-sale FFLs to conduct business while Freedom Group obtained a new one for the “new” AAC, and even after the new FFL was in place the existing stocks of guns and ammo that had been agreed upon as part of the sale remained in the “old” FFL’s bound books. The guns in AAC’s vaults became a tangled mess, and there was no end in sight to the compliance nightmare.
During this time, as court documents showed, Kevin had succeeded in pissing off Freedom Group to the extent that they were actively looking for a reason to fire him. The terms of his contract were that he would be an employee of the “new” AAC and retain control of that autonomous entity, and if he hit his performance metrics and was still employed come January of 2015 he’d be given an extra $4 million over the $10 million purchase price. Remington still hadn’t paid the full purchase price either, meaning that Kevin was stuck for another few years. The only good news was that Kevin was untouchable — unless he committed a felony, or broke company policy.
Remington and Freedom Group finally had their excuse to can Brittingham when a single antique silencer was delivered to AAC’s doorstep. Kevin had standing orders that any Maxim silencer his employees found should immediately be purchased for his collection, but he also used them as models for designing new silencers by examining their construction. He confirmed via text message that the silencer in question was indeed a Maxim, but he maintains that it was sent by Freedom Group to set him up. Nevertheless, even before it could be determined whether this was Kevin’s “personal” silencer or if it was for R&D at the company, Kevin was suspended.
Kevin immediately tried to contact Freedom Group about the reason for his suspension, and he wasn’t given any information. Despite repeated requests, he was never given a reason for his suspension or the results of an external investigation into the issue. The only thing he hard from Remington was that he had been fired “for cause,” which would void his employment agreement and leave him out $4 million. In reality, there had never been any cause for termination.
Kevin thought that he was canned, but Remington offered him an option. They told him that he had been fired “for cause” and that he could return if and only if he signed a document saying that he admitted fault, agreed to a lower pay (previously $250,000/year), and was on “probation” for a year during which they could fire him without notice. Kevin tried to negotiate the terms of the agreement, but there were no changes. On the dotted line of that agreement he signed only the word “flounder.” According to Kevin that was written in the “title” box, as Kevin had had his title changed from “president” to “founder,” but he doesn’t remember writing it.
It’s not clear whether Remington and Freedom Group realized that Kevin hadn’t signed the document or if Kevin had tried to “dupe” them but either way he came back to work, accepted the lower pay, and kept right on trucking. At court, it came out that the only person on Remington’s side who could sign the employment agreements and make them valid… never did. So even if Kevin had signed, Remington never did.
Remington eventually sent a single person to iron out the compliance issues, in the form of a former private investigator with a few days of ATF training and no background in compliance whatsoever. Repeated emails warning that the guy wasn’t qualified went unheeded, and he immediately set to work trying to untangle AAC’s books. I’ll spare you the details (it gets pretty dry), but here are the judge’s own words on the compliance officer:
[The compliance officer] was never intended to be a compliance person – at best, he was unqualified to ensure appropriate compliance; at worst, he was sent to AAC to find a basis to terminate Brittingham.
On November 16th 2011, Jason Schauble was plotting Kevin’s final demise. He had had enough of Kevin, and figured that Kevin didn’t deserve the $4 million that was coming to him. This despite Kevin meeting and exceeding his stated performance goal (growing the company by over 100%, more than the amount required by the employment agreement). In an email recorded in the final verdict, Jason Schauble outlines his plan.
I think you [Scott Blackstone, Freedom Group] and I should seriously consider a Plan B for this business. . . . If we terminate [Brittingham] at our discretion before the end of his year, we might lose Lynsey [manager at AAC and co-plaintiff in the suit] and we might lose Robert [Silvers, R&D genius and 300 BLK designer], and we might get sued, but we will keep a lot of other people and I’ll personally go down there and put people in place that will endure in the longer term and continue to grow this business. Also, this move will get Bob on board and de-risk this business. . . .
[T]he time is now to consider before we double down on our investment of a lot of our personal capital getting him his title and $$ back and enduring his inability to work within our system.
I have researched our Plan B options with APA, old employment agreements, new employment agreements, term sheets with probation statements, etc and can give you the bottom line tomorrow . . . . I also thought through various replacement options . . . .
I think we are at the juncture to discuss whether we want to make a leadership change for the long term at AAC if we believe that KB is not up to the task. If we do, we have until Jan. 9 or else it becomes a ton harder bc probationary period ends. . . .
It is important to point out that at the time this email was written, Remington and Freedom Group had no knowledge that Kevin had done anything wrong. He had pissed off the management, but that wasn’t sufficient cause for dismissal. Schauble and the rest of the Remington and Freedom Group board were not aware of any misconduct that would give them a reason to can Kevin.
On December 19th, Schauble got his response. Jason wanted AAC to be treated like another “plant,” like Remington or Marlin or Bushmaster, with Remington HQ as the head of operations. But Scott Blackwell at Freedom Group told him in no uncertain terms that AAC would remain a separate entity. At 5:00 PM, Jason Schauble sent in his resignation stating “I just don’t feel that we (fgi) have a fundamental philosophy that I can reconcile with on many levels.”
Back in October, a pre SHOT Show photo shoot took place at AAC’s HQ. During the shoot a number of guns were used which Freedom Group claims were Kevin’s personal firearms, but Kevin denies this claim. According to Kevin these guns all came from the old AAC location and were on the old FFL that was still being used by AAC to do business — the guns that were in the process of being transferred to the “new” AAC — and none of them were his personal firearms. He claims that one of the AAC employees brought them over and that he wasn’t even present for the photo shoot. The judge didn’t find Kevin’s testimony credible on that point, but the lack of evidence to support Freedom Group’s assertion that the guns were Kevin’s makes it a moot point.
Later that month the compliance officer finally arrived, and noticed that some of the guns from the shoot were still present. He immediately started segregating the guns and, with some help, forming a pile that were not able to be positively identified as AAC property. The compliance officer told Kevin verbally to remove any personal firearms from the premises, and Kevin set to work doing exactly that. One of the employees compiled a list of these guns and titled the pile “Kevin’s guns,” despite it actually being a pile of guns whose provenance was not known. At trial many of these guns turned out to not be Kevin’s firearms at all, and the rest were common firearms that were not conclusively Kevin’s guns.
It is important to note that neither the compliance officer nor any of the AAC staff assisting with the segregation process knew about the terms of the sale, specifically which guns of Kevin’s became the property of the “new” AAC. As such all they had to go on were the bound books for the new FFL, and the guns they were putting in the “Kevin” pile turned out to indeed be related to the sale of the company years earlier.
While the guns were being sorted, a hand written list of which guns were under whose ownership was compiled. It was nowhere near accurate or complete, and was intended as a starting point rather than a finished product. But months later when the list made its way to Freedom Group’s headquarters, they took it as gospel that the guns in the “Kevin” pile were all actually Kevin’s guns, did no further fact checking, and decided to fire him without notice.
On December 20th Kevin stayed late after a full day of work, disabled the main security camera, and removed all of the personal items that he could get his hands on. The judge thinks that Kevin might have been after some personal firearms as well, but Kevin says he just wanted to grab his personal effects — when he was suspended previously, Remington didn’t even let him grab his kid’s backpack before being thrown out of the building. The next day he was fired, supposedly for still having personal firearms on the premises.
The issue is that under the original employment agreement, Kevin needed to be issued a written warning and be given an opportunity to fix the problem (over a period of 30 days). That warning never took place, and no time was given. He was summarily fired for guns that either weren’t actually his or were being legitimately used for R&D purposes being in the shop, and that was a breach of the contract from Freedom Group’s end.
The conclusion of the decision is pretty awesome to read, and I recommend you do it in full. But here are the cliff notes:
- Kevin had been suspended for no reason — there was insufficient evidence that a single silencer whose provenance and purpose was unclear was justification for “cause” to fire him, especially when Kevin’s personal guns were still being used for R&D purposes as per the terms of the agreement.
- Freedom Group and Remington had been incorrect about their finding of “cause” for terminating Kevin, had withheld information by never providing him with any documentation about the investigation or even a detailed description of what he did wrong, and issued an ultimatum to sign the new employment agreement or lose out on all his money. Because of the false pretenses, even if Kevin had signed the document it would have been void and the original agreement would have remained in place.
- Freedom Group and Remington had conspired to find a way to fire Kevin in order to save $4 to $8 million that he was due as performance incentives and pay.
- Kevin never signed the new agreement, and Freedom Group should have known better than to consider the word “flounder” as Kevin’s official signature on an important document. The judge described it as an act of defiance and not a binding signature.
Due to these decisions, the judge ruled that Kevin had been terminated without cause and was due every cent of the damages that he demanded: somewhere around $14 million plus lawyer fees and interest.
[1/20/2014 – 10:38 AM: This post was updated thanks to an interview with Kevin Brittingham. Comments from Kevin are marked as such.]