McCann's Suit Against MDC, Kirshenbaum Nearing Settlement

Execs Say Unlikely to Turn Into Drawn-Out Battle

By Published on .

NEW YORK ( -- McCann Erickson's lawsuit against Canadian holding company MDC Partners and its Big Apple agency Kirshenbaum Bond Senecal & Partners is shaping up to be a short-lived ad scandal. Industry executives report that just one day after news of the suit broke both parties are now speeding towards a settlement.

Representatives for McCann and MDC declined to comment on the matter, as did both parties' lawyers, McCann's attorney Peter Altieri of Epstein Becker & Green, and Mitchell Gendel, general counsel at MDC Partners. A spokesperson for Kirshenbaum could not be immediately reached.

That the case could be resolved soon is a serious about-face from what the situation looked like only yesterday, when MDC released a statement saying it was prepared to vigorously defend itself against McCann's claims that it and its agency were poaching employees and trying to steal McCann's Weight Watchers account. MDC called the claims a "desperate attempt to stop employees and clients from continuing to leave McCann for other agencies."

Two industry executives said the change might have something to do with the involvement of Weight Watchers in the suit. In McCann's complaint, Weight Watchers' ad account was described as having been solicited by former McCann president and current Kirshenbaum President-CEO Lori Senecal. It claimed she also approached former McCann staffers. (Weight Watchers is a client of both agencies.)

A Weight Watchers spokeswoman declined to comment on the matter.

In a short while, the lawsuit, filed in a New York State Supreme Court, also generated a handy amount of buzz for all parties involved (sample Tweet: @ceoneill87 "Wow, what a shady situation" and @suddenlydog "This is the juiciest advertising news since DraftFCB/Walmart").

And it also made certain details -- like pay scales for executives at both agencies -- public. For example, according to the complaint, Ms. Senecal at the time of her resignation from McCann in August 2009 had an annual base salary of $500,000 and her value in total compensation was in excess of $1 million. It also alleges that MDC and Kirshenbaum lured away former McCann executive Ed Brojerdi by quadrupling his salary, awarding him a $250,000 signing bonus, and an annual bonus of 40% to 100% of his salary.

If the parties do reach an agreement rather than heading to trial, that would be par for the course with this type of employment claim, said Chris Davis, a New York employment lawyer who isn't connected to the case. "They almost always settle," Mr. Davis said, noting that "it's very hard to prove damages and there's a lot of case law that says former employees shouldn't be restricted in their ability to find new opportunities."

He added that this type of suit "is usually used as a tool to emphasize and reinforce the notion of 'You can't interfere with our business'" and that the monetary amounts exchanged don't tend to represent "monster settlements."

Most Popular