NEW YORK Interpublic Group's Universal McCann has asked the U.S. District Court here to summarily dismiss an age discrimination lawsuit brought against it by the shop's former evp, client services George Hayes.
In February 2006, Hayes, a 30-year veteran of the agency, was terminated. Three months later, the then 53-year-old Hayes filed his suit. The case had dragged on for 18 months in the discovery phase as both sides have gathered evidence.
But in court papers filed last month, UM asked the court to dismiss the suit, arguing that Hayes was terminated because the agency was gushing red ink. In court papers, UM said its New York office alone lost $8 million from January to October 2005, with worldwide losses for the period estimated at between $30-35 million.
Hayes was seen as part of the problem, given that several of major clients Hayes oversaw, including the $550 million Nestle account and the $350 million Lowe's business, had left the shop for other agencies, per court papers.
And UM said that Sony, another major client, had also expressed dissatisfaction when it had been Hayes' responsibility. In May 2005, the business was placed under the management of UM's Lynn Pinkus.
In his original suit, Hayes alleged that UM worldwide CEO Nick Brien, who joined in October 2005, was biased against older workers, and that such bias ran afoul of U.S. age discrimination laws. Hayes asserted that shortly after Brien arrived, the executive enthused that younger UM staffers "got it" in terms of understanding the digital-media landscape, implying that older workers did not.
UM countered that Hayes' implication was false. It asserted that Brien never said such a thing and that he does not believe understanding technology and its applications in marketing is linked to age. "In fact the individual that Mr. Brien believes to be the leading technologist in the industry today is Bob Greenberg," head of IPG digital shop R/GA, who is 60, UM said in its filing.
Hayes also claimed in his suit that Brien viewed "age and experience as a hindrance, rather than as a benefit," and that "'young' was valued in place of age." UM has also denied those assertions.
The agency said in its latest filing that UM veteran Murray Dudgeon recommended Hayes be terminated as part of a restructuring plan Dudgeon devised for the New York operations. Dudgeon, 52, retired as UM's COO this year, but remains a consultant to the agency. Dudgeon had been acting CEO of UM from March 2005 until Brien came aboard seven months later.
According to UM's filing, upon Brien's arrival, he asked Dudgeon to devise a restructuring plan so he could focus on shoring up accounts that were in jeopardy, including Microsoft, Intel and L'Oreal. The shop still handles Microsoft and Intel, but lost much of its L'Oreal business two years ago.
Dudgeon's plan called for the termination of approximately 30 staffers, a mix of junior and senior managers, including Hayes, who had a salary of $295,000, per court papers. In fact, UM said, 25 of those staffers were under the age of 40. "Mr. Brien was advised by Mr. Dudgeon that [by October 2005, Hayes] did not have any significant existing client relationships and, because he did not have direct client relationships, was not fully employed," UM said in the filing.
UM said Brien accepted Dudgeon's recommendation to terminate Hayes because "UM could not afford to carry a manager with no clients, businesses, or revenue to support his role."
UM said Hayes acknowledged in his pre-trial deposition that he did not believe age discrimination occurred at UM before the arrival of Brien.
The agency also dismissed suggestions raised in Hayes' suit that other 50-plus executives were the victims of age discrimination, including Jean Pool, who left the shop in 2006 at age 60 after a three-year stint as head of its local buying division LCI. (In 2005, LCI had lost its biggest client, General Motors, which spent $600-700 million annually in local measured media.)
UM said in court papers that in the process of downsizing LCI after the GM loss, Pool was offered the post of COO at sibling company Magna Global, which negotiates ad rates on behalf of both UM and IPG's other major media shop, Initiative. According to UM, Pool rejected the offer and opted to leave.
Hayes' response to the UM summary motion is due on Dec. 18.
Hayes is currently employed as vp, marketing and sales at fledgling music download service SpiralFrog.