JUDGE DENIES MIKE BURNS' MOTION TO DISMISS

Saatchi & Saatchi Allowed to Pursue Lawsuit Against Him -- With Limitations

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NEW YORK (AdAge.com) -- New York State Supreme Court Judge Herman Cahn has denied former Saatchi & Saatchi Vice Chairman Mike Burns’ motion that the claims against him by his ex-employer be dismissed.
The saga of Mike Burns and the 'Saatchi 17' -- one of the biggest stories of the advertising industry in 2005 -- will continue in court.
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The decision, filed yesterday, is the latest chapter in the ongoing saga of the so-called Saatchi 17, one of 2005’s biggest advertising-industry stories.

Saatchi in March sued Mr. Burns, who was with the agency for more than 25 years and worked mostly on the longtime General Mills account, charging him with violating his fiduciary duty and duty of loyalty to the agency, and with violating the terms of his employment contract.

Mr. Burns’ intention to leave Saatchi was announced internally to employees in early February, and he was scheduled to part with the agency in mid-March when his contract was up. But on Feb. 14, several days after he announced his departure, 17 Saatchi employees, all of whom worked on General Mills with Mr. Burns, resigned en masse from the agency.

Termination
On March 11, Saatchi terminated Mr. Burns’ employment and sued him. At the time, speculation swirled that General Mills, a Saatchi client for more than 80 years, might leave Saatchi. General Mills’ other agencies include Interpublic Group of Cos.’ Campbell Mithun, Minneapolis, and sibling McCann Erickson Worldwide outside of the U.S.

Saatchi in its suit claimed Mr. Burns disparaged Saatchi to agency employees and to General Mills, and that he told employees they should consider leaving the agency. According to Saatchi, Mr. Burns told employees he supervised “it would be better for all if the GMI staff moved to a different agency or set up an agency of their own to serve the GMI account.”

In addition to seeking damages of more than $3 million, Saatchi also seeks to bar Mr. Burns from launching a company or taking a job with any advertising, marketing or communications company that services General Mills. It also wants to prevent Mr. Burns from soliciting Saatchi employees and from divulging Saatchi trade secrets and confidential and proprietary information.

Mr. Burns on May 5 filed a motion to dismiss the suit.

Judge Cahn’s decision allows Saatchi to pursue its case on the grounds of breach of fiduciary duty and the breach of duty of loyalty. It can also pursue its claims on the grounds that it suffered financial damages and breach of contract.

Restrictions void
However, in what Mr. Burns’ attorney Daniel Kornstein called a victory, Judge Cahn limited the time frame that Saatchi can pursue its breach of contract claims to only when Mr. Burns was in the agency’s employ. “All of the restrictive covenants are void after his termination,” Mr. Kornstein said. Judge Cahn also denied Saatchi’s request to prevent Mr. Burns from ever taking a job with an agency that handles General Mills business, essentially allowing Mr. Burns to pursue a job in advertising and marketing and also work on General Mills.

However, it is unclear whether he would be allowed to work with his former 17 colleagues, who now are employed at Oneseven, an agency they formed after joining Interpublic in mid-2005.

Calls to Thomas Marino, an attorney for Saatchi & Saatchi, were not returned at press time.

Both sides have the right to appeal Judge Cahn’s decision.

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