Arun Sudhaman 11 Jun 2012 // 11:00PM GMT
DALLAS, TEXAS--Weber Shandwick's lawsuit against Hill + Knowlton Strategies has been settled, with a former executive admitting she took confidential information upon departing the former firm for the latter.
Weber Shandwick brought the legal action against H+K global COO Ken Luce and EVP Jody Venturoni earlier this year, claiming that they breached contractual obligations by soliciting clients, staff and confidential information. Other defendants named in the suit were H+K Strategies and Maxima Group.
Luce ended his 15-year Weber Shandwick career in late 2010, before joining H+K early the next year. 11-year Weber Shandwick veteran Venturoni, meanwhile, made a similar move in late 2011.
While details of the settlement are confidential, the Holmes Report understands that they include a sum of compensation along with an extension of non-compete agreements involving Luce and Venturoni.
In a statement, Weber Shandwick said the settlement protected "its business interests, its clients’ confidential data and its clients’ confidential information."
“During my last year of employment with Weber Shandwick and immediately after my resignation, I took confidential information belonging to Weber Shandwick," said Venturoni in a statement.
"I shared some of this information with employees at Hill & Knowlton. This information has since been returned to Weber Shandwick or destroyed. Weber Shandwick took justified legal action to protect its own business interests and those of its clients.”
“We regret the circumstances that led Weber Shandwick to take legal action against H&K and certain of its employees," added H+K. "We understand Weber Shandwick took this action to protect its business interests."
Weber Shandwick also said it was “extremely disappointed by the actions of Ken Luce and Jody Venturoni, but we are pleased with the conditions and terms of the settlement.”
Following the filing of the lawsuit, an agreed temporary restraining order against Luce, Venturoni and Hill & Knowlton was issued by a Texas court. This was extended by agreement and further court order on April 12 of this year.
We are glad that this settlement will put an end to Weber Shandwick’s lawsuit," said H+K SVP Elisabeth Rutledge. "Because our primary focus is our clients, we welcome a resolution to this distraction. Our strong Hill+Knowlton Strategies team continues to work hard for our growing list of clients around the world."
A senior H+K executive told the Holmes Report that it "readily acknowledges Jody Venturoni made a mistake, but it was not done with any ill will or intent to harm Weber Shandwick."
Weber Shandwick alleged, among other things, breach of contract and fiduciary duty against Luce and Venturoni; and misappropriation of confidential information against all defendants, including H+K Strategies.
The firm claimed that Luce and Venturoni solicited employees and clients from Weber Shandwick and that H+K “aided and abetted” these efforts, according to its court filing. Both executives are subject to the typical one-year non-solicitation agreement.
It also alleged that the defendants “possessed Weber Shandwick’s confidential information”, including details of client programmes and financial arrangements. After examining her computer for suspicious activity, Weber Shandwick claimed that Venturoni obtained "a wealth of confidential information" while still at the firm.
The case carries echoes of H+K’s legal action against Edelman in Australia last year. Edelman eventually settled the case, with two of its senior executives apologising to H+K.