McCann, MDC Partners Settle Talent-Poaching Lawsuit

No Money Exchanged, but Kirshenbaum Agrees to Six-Month Moratorium on Hiring From McCann

By Published on . 4

NEW YORK (AdAge.com) -- Interpublic Group of Cos.' McCann Erickson has reached a settlement agreement over the poaching lawsuit it filed in a New York Supreme Court against MDC Partners and its ad agency Kirshenbaum Bond Senecal & Partners.

Under the terms of the agreement, no monetary damages were paid, but MDC and Kirshenbaum agreed not to hire McCann talent or solicit McCann clients for at least six months, the parties said in a joint statement issued late today.

As Ad Age reported last week, what first appeared to be a potentially lengthy -- and nasty -- legal battle swiftly moved to settlement talks, a move which some executives attributed to a client of both parties, Weight Watchers, expressing its disapproval of the ongoing litigation.

The 21-page suit that McCann leveled against the Toronto-based ad holding company and its New York shop contained strongly worded allegations centered largely on former McCann, New York, president and now Kirshenbaum Bond President-CEO Lori Senecal, though she wasn't named as a defendant in the suit.

It alleged that Ms. Senecal, in violation of her contract terms, "disclosed McCann's confidential information to KBS/MDC" and then "lifted out key McCann employees and took McCann's business ideas, models and concepts to KBS/MDC, placing McCann at a substantial competitive disadvantage." Further, it stated that she solicited Weight Watchers to engage the services of her new shop and recruited several McCann employees, including David Jenkins, Kathleen Kehoe and Amy Hefti, who all resigned from McCann and shortly thereafter joined MDC, according to the suit.

Under the terms of the deal, there is no admission of wrongdoing by any parties or people involved in the suit, and there was no compensation of any kind between the parties.

However, MDC and Kirshenbaum agreed that they will not recruit or hire anyone from McCann or solicit or service any McCann clients until after Oct. 31, 2010, and in two instances until after Jan. 31, 2011. Those dates represent when the restrictions in the contracts of the former McCann employees will lapse.

Representatives for both agencies declined to comment beyond the joint statement.

The suit seems odd because it was so short-lived, and no money was exchanged. However, as one lawyer unrelated to the case, Chris Davis of the Ottinger firm, pointed out, such suits are often "used as a tool to emphasize and reinforce the notion of 'You can't interfere with our business.'"

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