McCann Erickson Sues MDC, KBS

McCann Erickson has filed a lawsuit alleging that Lori Senecal, the CEO of Kirshenbaum Bond Senecal + Partners (KBS), has recruited former colleagues from the Interpublic Group unit and solicited business from McCann clients in violation of her contract with that shop.
Those claims are made in court papers filed by McCann against KBS and its corporate parent, MDC Partners.
According to the suit, which was filed in New York State Supreme Court on Feb. 18, Senecal, who quit her post as president of McCann New York last August to become the head of what was formerly known as KB+P, has since solicited and performed work for long-standing McCann client Weight Watchers and other agency clients.

KBS and MDC have not filed a response.

Download the lawsuit.
McCann claims that Senecal signed off on one-year non-compete, non-solicitation and non-disclosure terms that applied to her post-McCann employment. At the time of the complaint’s filing, Senecal and KBS and MDC had recruited four McCann execs that had previously worked with her, the suit says.
In the filing, McCann additionally contends that Senecal was working on MDC-related business even while still at McCann, claiming that a month before she left, Senecal created a business plan she shared with her new employer and Weight Watchers. The complaint also alleges that Senecal took McCann’s business ideas, models and concepts to KBS and MDC.
McCann had no comment and Weight Watchers could not immediately be reached.

Mitchell Gendel, general counsel for MDC, responded: “The litigation is frivolous and without merit and we intend to vigorously defend it.” In a subsequent statement, MDC said the company believed Senecal was in compliance with her McCann covenants and also said McCann had made a settlement offer, which MDC and KBS declined.
Since Senecal took her new post, the agency and MDC have poached McCann execs with offers of up to a 50 percent increase in compensation to join KBS and MDC, sources said.
This appears to be borne out by at least one example cited in the lawsuit:
Edward Brojerdi, a project manager employed by McCann since June 1999, who was co-founder of McCann’s creative technology venture — called Split — “quadrupled his salary” when he joined KBS/MDC. He was also given a $250,000 sign-on bonus and “guaranteed an annual bonus of 40-100 percent of his salary.”
Also according to the suit: “The compensation terms offered by KBS/MDC speak volumes about the competitive edge that Brojerdi could bring to KBS/MDC through, upon information and belief, misappropriation of McCann’s proprietary and confidential information about the multi-million dollar Split creative technology venture.”
The suit also alleges that while still employed by McCann, Senecal provided the names of additional employees whom she considered to be key digital talent for recruitment purposes at her new employer.
The lawsuit names these McCann execs that it claims were recruited by Senecal to the crosstown shop:
• David Jenkins, evp, chief brand growth innovation officer, who was employed by McCann from May 2009 until his resignation in September. He joined MDC in October. During his McCann employment Jenkins reported to and worked with Senecal on several key accounts, according to the suit.
• Kathleen Kehoe, a McCann account exec since July 2006 who worked with Senecal on new business, resigned in early November of last year and started working at KBS later that month.
• The following month, Amy Hefti, svp, group director, employed by McCann since September 2008, resigned and within a week began working at KBS/MDC, the complaint says. At McCann, Hefti reported to Senecal and was the key account exec, along with Senecal, on Weight Watchers, according to the suit.
Since the complaint’s filing, two other McCann execs have joined KBS/MDC:
• Faris Yakob, formerly McCann evp, chief technology strategist, has become MDC’s chief innovation officer.
• Matt Weiss, the former chief growth officer of McCann Worldgroup, last week was named to the newly created role of chief of staff at KBS.
It is not clear if Senecal played any role in Yakob and Weiss’ hiring, however.

She and Weiss had 10 years of overlapping work experience at McCann, but MDC CEO Miles Nadal has been talking to Weiss intermittently for over a year and considered him as a candidate for the job that Senecal landed, sources said.
The circumstances around Senecal’s departure from McCann are raised in the lawsuit as well.
Senecal, who was making a base salary of $500,000 at McCann with total compensation of over $1 million, was required to give three months notice, and she also agreed to not take a job during that notice period, per court papers. Senecal also agreed to not accept a job at a McCann competitor for two years following the end of her employment at the agency, the suit says.
Senecal gave notice on Aug. 17 of last year and an MDC press release, which the suit says she worked on drafting while still at McCann, was issued the morning of Aug. 18.
The suit contends that Senecal and KBS/MDC are continuing their efforts to recruit McCann’s employees and clients to KBS/MDC as well as continuing “to disclose [and] misappropriate McCann’s confidential info to do so.”
McCann is requesting unspecified monetary damages. The lawsuit said Senecal “should also be required to forfeit all compensation she received during her period of disloyalty.”

According to the suit, Senecal had at least two months of contact with MDC’s Nadal last summer. The suit said she was sent letters reminding her of her McCann contractual obligations in August, after she resigned, and in October, after the hiring of Jenkins.

See also: “Troubled Times at McCann”