NEW YORK (AdAge.com) -- A bitter legal battle is brewing in adland, after Interpublic Group of Cos.' McCann Erickson leveled a lawsuit against Toronto-based holding company MDC Partners and its agency Kirshenbaum Bond Senecal & Partners for allegedly poaching key talent and plotting to steal its Weight Watchers account.
The 21-page suit, filed in New York State Supreme Court, contains strongly worded allegations that are centered largely on former McCann, New York, president and now Kirshenbaum Bond President-CEO Lori Senecal. However, she's not named as a defendant in the suit; the action was brought by McCann against MDC and Kirshenbaum Bond.
In the complaint, McCann claims that two months prior to her resignation she met with MDC CEO Miles Nadal, and "from that point forward, she had near daily contact with him, sparking each others' interests in the business plans, concepts, clientele and key McCann employees Senecal expected to bring to KBS/MDC."
It goes on to say that in violation of her contract terms, Ms. Senecal "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 states that she solicited Weight Watchers to engage the services of KBS/MDC, and recruited several McCann employees, including: David Jenkins, Kathleen Kehoe and Amy Hefti, all who resigned from McCann and shortly after joined MDC, according to the suit. Weight Watchers is a client of both McCann and Kirshenbaum Bond.
McCann representatives declined to comment on the lawsuit. But MDC and Kirshenbaum Bond released a lengthy statement detailing the reasons why they believe McCann's lawsuit is without merit, stating they will "vigorously defend" the claims, which they call "patently false and inaccurate."
According to the statement:
- Lori Senecal has complied with all of her restrictive covenants.
- The former McCann employees hired by MDC were solicited and hired by Miles Nadal and other MDC executives.
- None of the former McCann employees who were hired by Kirshenbaum Bond have used or misappropriated any confidential or proprietary information of McCann or of McCann's clients.
The statement also said "McCann recently offered to settle its lawsuit for an immaterial amount of cash, plus a standstill from KBSP and MDC restricting their ability to hire any additional McCann employees or solicit McCann clients. MDC and KBSP have rejected these initial settlement offers."
It added: "MDC believes that the McCann lawsuit represents a desperate attempt to stop employees and clients from continuing to leave McCann for other agencies."
Beyond the staffers the McCann suit recounts, MDC has more recently hired two other former McCann execs, Matt Weiss and Faris Yakob. Mr. Weiss told Ad Age he had been in talks with MDC for several months prior to his move, while Mr. Yakob resigned from McCann more than two months ago.
The last poaching lawsuit that made headlines in the industry was back in late 2008, when Omnicom Group digital shop Agency.com sued rival firm iCrossing, its CEO, Donald Scales, and a number of top executives for allegedly carrying out an illegal scheme to strip Agency.com of its best employees and key accounts such as Hilton and 3M.
That suit, filed in a Dallas court, asked for $19.5 million in damages due to what Agency.com called a systematic poaching of top management who defected to iCrossing. That litigation has since been settled, with iCrossing paying Omnicom and Agency.com an undisclosed sum.