Leo Burnett Sues to Stop Mass Defections

CHICAGO (CN) - The Leo Burnett ad agency seeks an injunction to stop eight employees who resigned en masse last week from nabbing a multimillion-dollar project for Kellogg.

Leo Burnett Co. and its subsidiary Arc Worldwide sued former employees Amanda Ashley, Nate Buechler, Allison Chaplain, Jeremiah Dy-Johnson, Kristy Gibbs, Lisa Hamming, David Rasho and Matthew Johnson in Cook County Court.

Burnett claims it has worked with Kellogg for more than 60 years, and built Kellogg's customer relationship management program from scratch, a project worth several million dollars.

Its customer relationship management (CRM) program includes "consolidation and integration of existing client databases; the ongoing collection and analysis of customer data, including analysis of data from customer loyalty program participation, statistical modeling, the development of marketing campaign strategies, the development of customized email and other communications to customers, and analyzing the effectiveness of marketing campaigns through appropriate metrics," according to the complaint.

However, "Late afternoon on Friday, November 2, 2012, seven of the 11 active employees working on the Kellogg CRM project announced that they were resigning effective immediately from Burnett-Arc, as did one employee who had worked on Burnett-Arc's CRM project for another account," the complaint states.

The three most senior employees of the eight told Burnett they were starting their own business.

Burnett claims that "the timing of the resignations was intentionally designed to maximize the defecting employees' ability to persuade Kellogg that they were the only people capable of completing the CRM project. Additionally, the defecting employees know the time deadlines under which Burnett-Arc is operating on the Kellogg project and in leaving when they did, it is apparent that they assumed Burnett-Arc would not be able to meet the client's deadlines and that, as a result, the client would have 'no choice' but to hire Defendants as the replacement for Burnett-Arc."

Burnett acknowledges that it will be difficult to meet its project deadlines for Kellogg after losing its skilled employees.

"Defendants know that, too, and it is obvious that they factored that into the timing of their resignations, as they know Kellogg will not endure a delay of up to six months or more for Burnett-Arc to try to fill these suddenly open positions," the complaint states.

"Moreover, the harm to Burnett-Arc of these abrupt defections goes beyond the potential loss of this particular project for Kellogg. ... The Kellogg CRM project is a showcase project that would have enabled Burnett-Arc to leverage what the company learned from the project to create similar optimization projects for other clients. If the defecting employees are permitted to continue working on and finish this project, they then will try to claim the project as their own in efforts to showcase it to other potential clients, thus depriving Burnett-Arc of the value of its investment in the project."

Burnett seeks an injunction forbidding the defendants from soliciting business from Kellogg, and damages for breach of contract, intentional interference, violation of the Illinois Trade Secrets Act, and conspiracy.

It is represented by James McKenna with Jackson Lewis.

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