If Frank Lowe had stopped at stealing Lowe London's biggest client, the $85 million Tesco supermarket chain, Interpublic Group of Cos. might not have done anything. But charging that he continues to pursue the agency's employees and clients for his startup, the holding company last week fired a legal warning shot at the shop's founder.
Lowe London's executive creative director, Ed Morris, quit last week to join Mr. Lowe's new agency. The next day, Interpublic announced it had started proceedings against Mr. Lowe "for violation of contractual and fiduciary duties arising from his tenure as head of its Lowe Worldwide agency network." Interpublic charged that Mr. Lowe "has begun a campaign to induce such executives and clients to leave the Lowe agency and join a rival firm which he is in the process of establishing." Interpublic likely hopes that Lowe employees and clients will think twice before defecting from the London agency. Mr. Lowe plans to announce his lineup of partners and possibly a second client this week. One potential new partner, Mark Cadman, is JWT London's managing director.
Holding them to it
Although Mr. Lowe's contract expired last September, Interpublic could argue that he contacted Lowe staff or clients before that, or that he is now contacting staffers who have employment contracts with Lowe. Interpublic said in a statement that, "We intend to hold any Lowe employee seeking to join Mr. Lowe to their full notice period."
Mr. Morris likely has a notice period of about six months. Interpublic has also decided to enforce a one-year non-compete agreement with Paul Weinberger, the Lowe London chairman who was the first to join Mr. Lowe as a partner when the new agency was announced last month, an executive familiar with the situation said.
Interpublic is pursuing its claims against Mr. Lowe through the American Arbitration Association in New York because the holding company's contracts with senior executives mandate that disputes be resolved through adjudication. Interpublic believes there is still a fiduciary responsibility because Mr. Lowe is paid retirement benefits and his name remains on the Lowe network, an executive familiar with the situation said.
A spokeswoman for Mr. Lowe declined to comment, saying that she had "no knowledge of this action apart from what we have seen on the newswires." Interpublic sent a separate letter to the new agency last week reminding former Lowe employees of their contractual obligations.
It's unclear how quickly an arbitration decision in the U.S. could be enforced against an individual and company operating in the U.K. Any arbitration decision would be codified into a court order and then taken to the U.K., where it would be enforceable, but the process could take six to 12 months.