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Former Mercedes US CEO Lieb sues for wrongful dismissal

Mercedes Benz fired US Chief Executive Officer Ernst Lieb in October for improper use of company funds after he allegedly used over $100,000 to buy things for his home such as a home theater system and now, Lieb is taking Mercedes’ parent company Daimler to court to clear his name.

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Ernst Lieb (shown on the far right of the image to the right) was removed from his position in October with the company stating that it was due to Lieb’s misuse of company funds to upfit his home. Lieb’s lawyer Stefan Naegele claims that his client did not misuse any funds but instead, the $100,000+ that Lieb spent on the company-owned home was required maintenance. The items specifically mentioned in discussions about Lieb’s firing were a high end home theater system, a new washer and dryer, a built in barbecue system and a home gym. However, Naegele claims that these expenditures were approved by Daimler facilities management divisions, pointing out that the gym was refurnishing after sustaining water damage and the washer/dryer were replaced because they were in disrepair. Mind you, the Mercedes Benz owned New Jersey home is worth an estimated $1.4 million so you have to wonder just how bad the items that Lieb replaced really were when they weren’t good enough for him.

Daimler began the audit of their overseas executives and in doing so, found fault with quite a few of their now-former executives’ use of the company expense accounts. Mr. Naegele represents several of those fired bosses and in short, it seems that his argument is that “everyone was doing it” so his clients shouldn’t have been fired but considering that all of his clients were doing it and all of them were fired – it could be tough for Mr. Naegele to convince a court that his clients were removed unfairly. However, the fact that Ernst Lieb was using company funds to dress up a company-owned house with expenses previously approved by the company could give Lieb’s legal counsel a leg to stand on.

Ernst Lieb served as the CEO of Mercedes Benz USA for five years before being ousted over the alleged misuse of company funds and earlier this month, Daimler announced that 50 year old Mercedes marketing boss Steve Cannon would assume the role of CEO of MB USA.

While it isn’t likely that Mr. Lieb will get his job back, if his legal team can prove that he did not break any company policies it could help to clear his name and repair his career. As it stands right now, it might be tough for Lieb to find a similar job in the industry as a 56 year old man with a history of stealing from the company to dress up his home. However, if the court rules in Lieb’s favor, the former CEO could clear his name and possibly stand to receive a cash payday if the court believes that he was unfairly terminated.

Other Mercedes Benz News:
Ernest Lieb Out as CEO of Mercedes-Benz USA
Cannon Replaces Ousted Lieb as President and CEO of Mercedes-Benz USA
Mercedes-Benz SL Roadster a fashion icon
Mercedes Benz recalling select BlueTec diesel models over fire hazards

Source: Automotive News

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Anonymous (not verified)    December 28, 2011 - 3:01PM

Well, of course, lawyers' clients are ALWAYS innocent of wrong doing - it goes without saying...

I suspect Mr. Lieb received a nice severance package anyway, probably negotiated prior to accepting the position in the first place.

Keith Griffin    December 28, 2011 - 4:06PM

Speculation from those familiar with the situation say it goes beyond Lieb's improvement to the company owned $1.4 million home in New Jersey (which would probably be a $500,000 in most parts of the U.S.) He was also allegedly charging his wife's travel expenses to the company and other personal expenses. As pointed out, an executive doesn't get fired for making improvements to a company-owned property unless somehow those improvements went to another property not owned by the company. Wouldn't be the first time a washing machine ended up where it wasn't supposed to or a high-end home entertainment system actually was two systems.
Mercedes is under a lot of pressure to keep its nose clean in the U.S. by its compliance division. It is cracking down on, as Patrick reports, on any appearances of financial malfeasance by its executives, even successful ones like Lieb.