Theranos Australia Pty Ltd (Theranos) is a medical technology company specialising in developing and manufacturing new blood testing products and other diagnostic tools. The company is run by a charismatic CEO named Elizabeth.

Over the past few years, Elizabeth has been very successful at attracting investors and promoting the company to prospective clients and research partners including public hospitals, elite sporting teams and the Australian Defence Force. In order to drive this rapid growth, Elizabeth recruited a number of experienced and highly regarded medical professionals including Karen.

Karen commenced employment with Theranos in mid-2019 just after her 50th birthday. She was lured away from a high-paying job at a large pharmaceutical company, Jenzen Medical Products Limited (JMP) having been told by Elizabeth that Theranos was about to take-off. She is now engaged in the position of Production Manager on a salary of $275,000 plus bonuses.

Karen was reluctant to leave JMP as she had good job security and leaving in the middle of the year meant that she would forgo her usual bonus. Elizabeth got her across the line by making a number of promises over dinner at a fancy restaurant including a $100,000 retention bonus if she stayed at Theranos for 3 years, promotion to Chief Operations Officer within 5years, and a 2% shareholding in the company (subject to financial goals TBC).

None of these details were included in the letter of offer provided to Karen, however, Elizabeth seemed like a trustworthy person, so Karen proceeded to sign the contract and resign from JMP. The contract specified that Karen's leave entitlements were as per the NES, and the termination clause only spoke about summary dismissal for serious misconduct. There was no entire agreement clause.

Unfortunately for Karen, Elizabeth never followed through on her promise to develop a shareholder agreement, there is no succession plan for her to take over from the current Chief Operations Officer, and Theranos is refusing to pay the retention bonus even though Karen has reached the 3-year milestone.

Unbeknownst to Karen, Theranos was coming under increasing regulatory scrutiny and pressure from investors because its blood testing machines didn't actually work very well. In an effort to save money and prevent employees from 'blowing the whistle' on her lies, Elizabeth goes on a firing spree and terminates a number of senior staff including Karen.

Karen received the bad news via a text message from Elizabeth. The text said that Karen's employment would end effective immediately and she would receive 3 weeks' pay in lieu of notice in accordance with the NES in her next monthly pay.

Meanwhile, Theranos' HR Manager Paul has been dealing with a number of sensitive issues including a formal complaint by a young Customer Service Officer, Heidi, against a Team Leader in the Customer Experience Department, Ethan. The complaint was made via email and refers to Theranos' bullying & harassment policy.

Ethan is a highly regarded and well-liked member of staff, but Paul thinks he may have crossed the line. Heidi's complaint alleges that Ethan told a number of dirty jokes at a recent team event held at 'Holey Moley' minigolf in the CBD. She also alleges that Ethan is notorious for micro-managing and yelling for making mistakes.

Heidi's email complaint also encloses a number of screen shots showing Ethan making dubious comments on colleagues' social media posts e.g. "Damn you are looking fine :-)" and "Could do with some cuddles from you! LOL". Heidi feels very uncomfortable working with Ethan and is considering making an external complaint in the FWC or VCAT.

What claims could Heidi make against Ethan, and what are the potential consequences for Theranos if she makes external complaints?