Business & Tech

SC Johnson Employee To Former Employee: "You Called My Company A Criminal"

Former employee, Michael DeGuelle, accused of defaming SC Johnson. Trial began today.

A former SC Johnson & Son employee, who accused the company of committing tax fraud, was in court today facing a defamation lawsuit.

SC Johnson first sued Michael DeGuelle over his taking company documents home. The company later filed a defamation suit against him. DeGuelle then countersued SC Johnson for defamation. 

In court Tuesday, SC Johnson officials said DeGuelle tarnished the company's reputation on a "far reaching and global scale."

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Jeffrey Leavell, an attorney representing SC Johnson, said in his opening statement that the company is seeking $50,000 from DeGuelle, a fraction of the $150,000 the company spent on trying to repair its reputation.

“Rather than attempt to regain all of the money the company spent… We are not here seeking punitive damages,” Leavell said. “We ask that the court order the complete return of the documents that are under the Mr. DeGuelle's control."

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The scope of the proceedings was supposed to be limited to the defamation case, but questions levied by DeGuelle, who represented himself, often spilled over into allegations of wrongdoing by SC Johnson.

Racine County Circuit Court Judge Charles Constantine reminded DeGuelle frequently that he hadn’t filed any opposition to the facts contained in SCJ's summary judgment motions and that the IRS, even though SC Johnson had filed amended tax returns, did not view the company’s handling of its taxes constituted tax fraud.

“The problem Mr. DeGuelle is that you are taking it as a given that the company filed a false tax return, but you haven’t really produced any evidence to support that,” Constantine said. “Just because a company files an amended return doesn’t mean they committed a criminal act.”

As of noon, only Kelly Semrau, a senior vice president for global public affairs at SCJ, had outlined how DeGuelle, who she said went to local media with company documents accusing them of criminal tax fraud, impacted the reputation of the company.

DeGuelle continued to try to bring the question of ethics into his cross-examination as he questioned Semrau on the ethics of tax collection.

At one point DeGuelle asked Semrau: “Do you understand that there is a differencebetween what is morally right and what’s unlawful?”

He then gave the example of a person purchasing items from a store and the person realizes they received too much money in change back.

“If you are given a $10 bill when you should have received $5, what is your moral and ethical obligation? ….Do you enrich yourself at the expense of others?”

“If someone makes a mistake, I think I would point that out,” Semrau responded.

But Constatine pointed out that the company had acknowledged the mistake in trying to claiming too much of a tax credit, and had not received any cash; that the IRS wasn’t out any money because the returns were corrected and the change in amount of credits available to the company was adjusted so that it could apply to other years.


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