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Shell sues former head of security for threatening to reveal secrets

By L.M. SixelApril 5, 2017

Crockett Oaks III, a former FBI agent who led the U.S. security operations of Shell Oil Co., was part of a selection committee that last year recommended the hiring of a 53-year-old man with a military background as a security adviser. But when the company directed the committee to find a younger female candidate, Oaks objected to hiring based on age or gender and was subsequently fired.

Those allegations are contained in a lawsuit filed by Oaks that is testing the limits of employee confidentiality agreements. Shell Oil, the U.S. subsidiary of Royal Dutch Shell, last week obtained a temporary court order blocking Oaks from revealing potentially damaging information about Shell’s personnel practices to support his claim.

As head of security, Oaks was privy to confidential personnel decisions that might show that his firing was retaliatory, according to court documents. Shell alleges that Oaks violated his employment agreement when he shared confidential information with his lawyer and a third-party mediator brought in to settle the dispute.

Shell also claims Oaks breached his duty of loyalty and good faith to Shell by threatening to disclose details of internal investigations at Shell that the company believes are confidential.

Seeking and obtaining a restraining order is unusual in cases involving confidential information, legal specialists said. Typically, both sides agree in advance to file confidential information under seal such as patents, trademarks or even Social Security numbers. The information can be used as evidence in the case, but it’s not part of the public record.

The issue of confidentiality comes up most often when employees who feel wronged were former high-level executives privy to corporate secrets that they promised not to reveal, Houston employment lawyer Martin Shellist said. But confidentially agreements also can’t block an employee – or ex-employee – from getting legal help.

“It doesn’t mean they can’t talk to their lawyer about it,” Shellist said.

Shell declined comment. Oaks and his attorney, Houston employment lawyer Mark Oberti, also declined to comment.

Oaks, who began working for Shell in 2003, was responsible for investigating security threats to employees, property and the company’s reputation, and was required to keep even the existence of investigations a secret.

When a job for a security adviser opened up, the selection committee, which included Oaks, chose the older man as the most qualified, according to court documents. The candidate was already working for a contractor that provided security for Shell and a colonel in the U.S. Army Reserve. The candidate served in the same reserve unit as Oaks, a lieutenant colonel.

After the committee made its choice, Oaks alleged, his boss in the Netherlands was “frustrated and unhappy” about the recommendation, which was made despite earlier instructions to look for someone who was younger and a woman.

“The profile we discussed was ex-government agency, still early in career and (based on previous conversations) you know I would want you to look particularly at female candidates,” according to one email from Oaks’ boss in September, which was cited in Oaks’ complaint.

The committee’s preferred candidate was not hired, but he was told he could reapply when the position was reposted, according to court records.

Oaks objected to the use of age and gender during a subsequent conference with human resource representatives and later with his boss. About three months later, on Dec. 6, Oaks was dismissed for failing to report that he and his preferred candidate were part of the same Army Reserve unit and recuse himself from the hiring process.

In his lawsuit, however, Oaks said the issue of his military relationship was a “bogus cover” to fire him. Oaks said that he did not report to the job candidate in the military and that he repeatedly disclosed their military connection to Shell officials. Oaks also said he had details of other Shell employees who were hired based on their military affiliations, but did not lose their jobs. Oaks decided to sue.

Before filing in federal court in Houston, Oaks and his lawyer notified Shell of the pending complaint, a common legal practice to launch settlement talks. About a month later, Shell filed for a temporary restraining order in state court, alleging that Oaks’ plan to reveal sensitive personnel information through his lawsuit was an “effort to coerce the company” into a financial settlement.

State District Court Judge Bill Burke granted the order, which prevents Oaks from disclosing confidential details, including results of Shell’s investigations.

The restraining order didn’t stop Oaks from filing his lawsuit against Shell last week in federal court in Houston. The lawsuit included five pages of blacked-out allegations that would have exposed the employment history of Shell employees who committed unspecified acts of “wrongdoing,” yet were not terminated, according to court documents.

Oaks, who earned more than $325,000 a year as security chief, is seeking back pay, unrealized stock options and lost pension benefits.

A hearing on the restraining order is set for April 21 in state district court. But Burke noted in his order that the federal court should be the one that decides what is permitted in the federal pleadings.

The federal case has been assigned to U.S. District Judge David Hittner, who has scheduled the first conference for June.

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