Confidential emails! Salary increases! Material breaches! Hostile witnesses! Cranky judges! All this and more took place within the walls of Judge Peter Leisure‘s court yesterday down at Federal Plaza as proceedings for Abate vs. International Creative Management got underway. If you like verbal jousting, a near-continuous stream of objections from both sides and more information than you ever wanted to know about how ICM does business, what they pay their agents and how they structure their contracts, then keep reading this post – and tune in next week for the continuation, because this preliminary hearing was nowhere close to completion by the end of business hours yesterday. “Frankly, I feel like most of this is wasting my time,” a visibly impatient Leisure decreed. I wouldn’t quite agree, but then, I’m a neophyte to these things and still regard litigation as theater, even as I recognized that there were some seriously unhappy people in the room: Richard Abate, as he answered testimony with gritted teeth; ICM lead counsel A. Michael Weber of Littler, Mendelson PC, visibly irritated by Abate’s careful wording and evasion of repetitive cross-examination; Abate’s own lead counsel, Brian Kaplan, overruled roughly 3/4 of the time on objections; Esther Newberg, who endured the day’s testimony and still didn’t get a chance to speak under oath; and Judge Leisure, who started his courtroom duty (on an unrelated, earlier case) delivering what had to be one of the most formidable smackdowns I’ve ever seen, coming near damn close to making a lawyer cry – or at least beg to be taken off duty…
A little after 10:30, Judge Leisure conferred with ICM and Abate counsel in camera and ruled that the preliminary injunction hearing could go ahead, but nothing about a temporary restraining order could be discussed (it seemed the issue got confused.) Despite Leisure’s assertion that there was “very little suport for the plaintiff’s allegations,” he was “impressed with the quality of lawyers in this case.” Each side then made a preliminary statement outlining their respective slant of the story, and then testimony got underway with ICM General Counsel Richard Levy taking the stand, followed by Abate (with a brief interruption to accomodate travel arrangements for one of Abate’s clients, Michelle Singletary) until adjournment.
Here’s what we now know: Abate signed on with ICM in 1996, leaving behind what he deemed “the lowliest job in publishing” as a permissions assistant with Random House, making a little less than $20,000 a year (breaking down to $400 a week.) In the ten-plus years with ICM – involving a total of four employee contracts – his base salary increased to its final tally of $260,000 as negotiated through a three-year deal originally signed in 2004. All of those deals followed a basic template (Abate testified that ICM agents “weren’t allowed to make changes”, citing a “brutal battle” by Sloan Harris’s lawyers when he wanted to make changes to allow for a side business) and all of them had what appeared to be fairly strict non-compete clauses that only allowed for leeway during the final 30-60 days of the contract, which was confirmed by Levy in his testimony.
On January 25 of this year, with more than 11 months remaining on that deal, Abate was called into a meeting chaired by Chris Silbermann, with co-presidents Newberg and Sloan Harris present as well. There, Abate was told his contract would be renegotiated, giving him a raise to $500,000, with increases through to early 2010. “We’ve never done this before but we’re going to tear up your contract,” Silverman said, according to Abate’s testimony, “but you’ll have to sign it now.” Abate appreciated the offer, but had a lot of questions about ICM (which he didn’t elaborate on, at least not yet, though he did mention one Friday where none of ICM’s New York employees got their checks in a timely manner.)
“I don’t want to sign.” “Why?” “I want to discuss it with my wife.” “Dude,” said Harris, “sign it now, you won’t get a better deal.” Abate insisted on getting the contract in writing, and did so in an email sent via Levy. The next day, Abate called Endeavor and spoke to Nancy Josephson – interestingly, the daughter of ICM founder Marvin Josephson and herself recently fired from the company – about whether Endeavor was “interested in doing books.” Weber kept harping on this time and again, trying to understand what this meant in plain English. But this is publishing, and Abate wasn’t about to say he thought Endeavor was going to offer him a job when there was only interest in play. Abate spoke a few times with Josephson and once with Endeavor president Ari Emanuel about this interest – brief conversations, no real specifics (much to Weber’s frustration) and we still aren’t sure how exactly this led to what happened on February 9, when Abate told ICM he was leaving to helm Endeavor’s book division.
After this happened, Singletary, a columnist for the Washington Post and author of two business books for Random House, testified she received a phone call from Newberg saying that Abate was no longer with the company. She called his assistant, who was cagey about Abate’s whereabouts, and only learned about his status when she went online and checked a blog “she’d never heard of before” (which was either Gawker or GalleyCat based on the timing.) “I was completely shocked,” she said about hearing the news from Newberg via voicemail. “I wanted to stay with Richard as he’s been an excellent agent, friend and negotiator.” She had said earlier that Abate “does what’s best for my family and considers my personal well-being in addition to how much money you make.”
Singletary was just one of 50-odd clients finding out about Abate’s departure – directly or indirectly – and in the meantime, ICM was assembling itself for a fight. Levy learned of Abate’s impending departure at 7 AM PDT on February 9, and a half-hour later was advising senior executives of what took place – and advised them to “do nothing, announce nothing or seek outside communications.” Even though, according to Levy, Abate was in material breach of his contract, the decision was made to keep him an employee until which time termination, or an amicable agreement with Endeavor, could be reached. But as this was happening, Levy requested that Abate return “company property” – specifically, his security ID badge, a cell phone and a Blackberry. The latter items were not returned and Levy sent repeated email requests to Abate which he testified were ignored. Only a month later, through Abate’s lawyers, were the items returned.
Levy also testified about other crucial documents, including more email exchanges and FedEx slips that showed Abate – or at least, someone at ICM – had sent confidential information from the offices to Abate’s home. Further testimony revealed that such items were sent to Abate’s residence dating back to November 10, though few details were revealed yesterday. But Levy’s testimony seemed to implicate Abate as well as his wife, Melissa Moore, and her father, Harold Moore. Ultimately, ICM terminated Abate on March 9, citing material breach, disclosure of confidential information, using company email to disseminate confidential information and intent to solicit clients to his new venture. Abate’s lawyers countered by saying he was not in breach, and that ICM was, in fact, anti-competitive.
Though it’s still too early to tell how Judge Leisure will rule, it did seem that he was inclined to go ICM’s way until Weber started nitpicking Abate’s testimony every which way – at which point the judge seemed to lose patience with everybody, staring at the clock, occasionally holding his head in his hands and finally cutting things short. But it seems to me that no matter how Leisure rules, this is one fight that could take a very long time to settle – and if so, the careers of four dozen authors, not to mention agenting practices, may be in the balance.