Following a judge's decision against them, the Interpublic Group and Foote, Cone & Belding decided late Friday to drop their lawsuit against Omnicom and DDB.
A motion seeking a temporary restraining order to prevent DDB's raiding of FCB talent to run its new Quaker business was denied after a hearing Friday afternoon in a Cook County courtroom in Chicago. With that, FCB CEO Brendan Ryan said, "There is nothing to be gained by proceeding further with the court action.
"Our whole objective was to maximize our ability to retain key people," he said.
The decision put a halt to what figured to be a dramatic battle between two major holding companies. The lawsuit against Omnicom, DDB and former FCB Chicago president Brian Williams charged breach of contract and fiduciary duties and tortious interference with contract and business relations.
It argued that Williams, who resigned from FCB Sept. 27, violated employment agreements by helping DDB take over Quaker, specifically by identifying key FCB employees to pursue. The suit sought to stop him from working on Quaker or any other former FCB client at DDB and to prevent DDB and Omnicom from recruiting FCB staff or clients. It also sought unspecified damages.
Several of the arguments made in the suit were also made by attorneys for IPG and FCB in Friday's hearing. Most appeared to be successfully shot down by attorneys for Williams and Omnicom.
In denying the restraining order, Cook County judge Sophia H. Hall noted that IPG does not claim Williams did anything to cause Quaker to pull its business from FCB and that all of his meetings with Omnicom and DDB occurred after Pepsico-owned Quaker moved its account to DDB on Sept. 19.
Hall said the evidence would force her to "draw negative inferences" about what Williams and DDB were doing in the days leading up to his resignation from FCB-something she declined to do.
The claims about a "conspiracy" between Williams and DDB were largely backed by what even an FCB attorney acknowledged amounted to hearsay evidence based on conversations between Williams, Omnicom CEO John Wren and DDB execs.
During the hearing, IPG and FCB attorney Craig Boggs said FCB's Ryan had cut a deal to keep Quaker at the agency despite its pending acquisition by Pepsi. To convince Pepsi to keep Quaker at FCB, Ryan "entered a commitment" that would pay Quaker $20 million if the Coke/Pepsi conflict proved unmanageable, Boggs said. Despite this, Quaker told Williams this summer there was still a chance FCB would lose the business, but Williams failed to take steps to prevent that, Boggs alleged.
"He was doing nothing to serve FCB," Boggs said. "He was doing everything to serve himself."
Williams' attorney, Chester Kamin, countered with an affidavit from a Pepsi executive who said Williams had nothing to do with Quaker's move to Omnicom.
"They [IPG and FCB] knew and the entire industry knew that [IPG's Coke business] created an irreparable conflict," Kamin said.
IPG has been down this road before, suing former Lowe co-chairman Marvin Sloves two years ago for $25 million amid similar accusations. Sloves was charged with being negligent with Lowe's Mercedes-Benz account. That case was settled out of court.
In this case, IPG and FCB's lawsuit stated that Williams signed confidentiality and non-solicitation agreements in March 2000 and again last February that barred him from working for any FCB Chicago client or soliciting or hiring any FCB Chicago employees for one year after leaving the agency.
Yet in meetings with DDB in the week prior to his resignation, Williams worked with Omnicom and DDB to solicit key FCB employees on the Quaker business, the lawsuit stated.
Among those he allegedly solicited were Martin Sherrod and John Fraser, both of whom also resigned Sept. 27, according to the lawsuit.
The suit also alleged that Williams told Ryan on Sept. 24 that he had an opportunity to join Omnicom to service Quaker; and that Williams and FCB's Jonathan Harries, another DDB target, then flew to New York and met with Omnicom and DDB representatives. (Harries, however, stayed with FCB and has been named chairman of FCB Chicago and FCB's worldwide creative director.)
The two also met with Ryan on Sept. 25, and Ryan asked them to stay, the lawsuit stated.
According to Williams' Sept. 27 resignation letter to Ryan, he left for "the opportunity to become CEO of an independent agency within the DDB/Omnicom world."
Williams also acknowledged discussing his plans with three FCB employees key to Quaker in the letter, but wrote that "beyond that, I have not talked to anyone at FCB or other FCB clients per the terms of my non-solicitation agreement."
"I look forward to an amicable parting of ways," he wrote.
Williams could not immediately be reached. Attorneys for IPG and Omnicom declined comment.