CHICAGO -- Pepsi-owned Quaker Oats has sued its longtime agency, FCB Worldwide, in U.S. District Court in an effort to stop the shop from working on rival Coca-Cola's Powerade.
The federal lawsuit follows action by Pepsico in Cook County Circuit Court last week against FCB. That suit resulted in a temporary injunction that bars employees of the agency who worked on Pepsi's Aquafina from meeting with Coke over its Dasani water brand. A hearing is set for Friday.
The federal lawsuit argues that because of Foote, Cone & Belding's long tenure on Gatorade and its intimate knowledge of the brand's marketing strategy, confidential and proprietary information could be used by FCB or its parent, Interpublic Group, to the advantage of a Pepsi or Quaker competitor--such as Coca-Cola.
The lawsuit states that Jonathan Harries, FCB's worldwide creative director and chairman of the shop's Chicago office, told Quaker on Oct. 24 that the Powerade account would serviced out of Chicago, as had been anticipated.
Quaker subsequently sought assurances that FCB employees who worked on Gatorade would not work on Powerade, but IPG refused to confirm that FCB would handle Powerade and said "our internal staffing of assignments remain our prerogative and concern," according to the suit.
Quaker alleges that FCB's acquisition by IPG, the assignment of Powerade to FCB Chicago and the refusal to "wall off" employees who worked on Gatorade from the Powerade account show that FCB "is not acting and will not act in good faith to protect Quaker's trade secrets and confidential information."
The lawsuit charges FCB with breach of contract, a violation of the Illinois Trade Secrets Act and breach of fiduciary duty. It asks that FCB be barred from working or assisting on Powerade, that "insulating walls" be built between the agency and any group or individual that has Coke as a client; and that FCB be prevented from revealing Quaker secrets. In addition, it asks for unspecified monetary damages in excess of $75,000.
"The American consumer will be advantaged by strong and fair competition in the sports drink category," the lawsuit declares, "and should not be deprived of that competition."