Saatchi, Burns Settle Lawsuit

NEW YORK Saatchi & Saatchi and Mike Burns, the former worldwide account director on the agency’s General Mills business, have reached an out-of-court settlement in a lawsuit that Saatchi filed last year, claiming that Burns had orchestrated the walkout of 17 Saatchi staffers in February 2005, all but one of whom worked on General Mills.

The mass exodus occurred three days after Burns, a 25-year veteran of Saatchi, left the Publicis Groupe shop. The ex-staffers landed at Interpublic Group, where they started an agency called OneSeven inside the office of IPG’s Lowe in New York.

In New York State Supreme Court, Saatchi sought damages of $3 million on claims of breach of fiduciary duty, breach of the duty of loyalty and breach of contract. Burns, in response, filed a motion to have the suit dismissed, saying that Saatchi had failed to show damages. (Saatchi’s New York office has not lost any General Mills business since the exit of Burns and the 17 staffers, let alone to OneSeven.)

In January, however, state Supreme Court Judge Herman Kahn largely rejected Burns’ motion, though he narrowed the focus of the suit and agreed that Burns should be able to continue to work in the business [Adweek Online, Jan. 11].

Saatchi’s original claim sought an injunction to bar Burns from “directly or indirectly launching any company or taking employment with any advertising, marketing or communications company which services” General Mills. The judge deemed the request “overbroad” because Saatchi “failed to specify either a time or geographical limitation to the restrictions requested.”

IPG disclosed the settlement today in a one-paragraph statement: “The terms of the settlement are confidential; however, the agreement reached resolves all legal claims and disputes between the two parties, as well as disputes between Saatchi & Saatchi and various individuals who left Saatchi & Saatchi in February 2005.” IPG declined further comment.

In a statement of his own, Burns said, “I’m absolutely thrilled with the settlement and the move to put the suit behind me. I feel like a gigantic burden has been lifted from my shoulders. I still have many friends at Saatchi and I wish them well, but Saatchi represents the past.”

Burns, who became chairman of OneSeven in January, added: “I’m now excited to create the future with OneSeven—IPG’s newest agency—which was uniquely designed to provide brand leadership and competitive advantage in this time of great marketing change, complexity and opportunity.”

The shop’s clients include ConAgra Foods’ Hebrew National, McGraw-Hill’s BusinessWeek and Unicef, for which it handles an ongoing project.

A Saatchi representative declined comment.