Balancing act in Pepsi suit

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PepsiCo had the right to pack up its business and exit Foote, Cone & Belding Worldwide rather than co-exist with Coca-Cola Co. inside the Interpublic Group of Cos. agency family. But having left by its own choice, PepsiCo is not owed sweeping power to control what FCB can and cannot do with the staff that once worked on its business.

There's still a chance the lawsuits brought against FCB by PepsiCo will be settled out of court, their terms never disclosed in detail. But the issues raised in this divorce gone bad should stir some frank discussions between advertisers and clients everywhere about an advertiser's rights to control the future conduct of a former agency. What PepsiCo wants from FCB seems to give too much control to the former client in the name of protecting trade secrets and confidential information. A remedy that interferes less with agency management and the careers of individual workers seems more appropriate.

Interpublic and FCB have brought on some of their own troubles in this dispute. It now looks like they may have fought too hard to convince PepsiCo it could safely stay at an agency whose new Interpublic siblings included key Coca-Cola Co. roster shops. In that effort, remarkable promises were offered to quell PepsiCo's concern that sensitive information would leak to Interpublic's Coca-Cola agencies. Included was a promise that "no employee who had performed services for any PepsiCo brand would be transferred to a Coca-Cola or Coca-Cola affiliated account for at least a minimum of two years after leaving the PepsiCo business."

PepsiCo is now asking the court to enforce this offer-which FCB contends is not binding since PepsiCo opted to take its business elsewhere-along with other measures. In today's light, this idea invites over-reaching by an advertiser into the affairs of its former agencies.

Agencies and clients can negotiate reasonable agreements to safeguard confidential client information. But accounts do move, and advertisers should not overplay their hand in asserting the right to control how agencies, and agency workers, conduct their business lives long after the agency "partnership" is over.

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