The June 20 issue of New York Magazine recounts the saga of Mike Burns and 17 other former Saatchi advertising executives who left Saatchi because they were not comfortable, to say the least, with Saatchi chief Kevin Roberts's management of the agency. Burns, a top Saatchi executive in charge of the lucrative General Mills account, resigned and negotiated a separation package that included a one year non-compete clause, primarily to stop him from taking the General Mills business. The 17 other executives quit a few days after Burns quit. Saatchi then filed a $3 million lawsuit against Burns, alleging that he breached his contract and violated his fiduciary duties by engineering the departure of the 17 with the ultimate goal of taking the General Mills account.
Interestingly the other 17 executives did not have employment contracts and are not defendants in the lawsuit. But did these employees have any obligations to Saatchi during their employment that might form the basis of a lawsuit? Many states recognize that employees, even at-will employees, have a fiduciary duty of loyalty to their employer. For example, employees are not permitted to use confidential information to undermine their employer. More generally, employees may not act in ways that are contrary to the interests of the employer. It is not clear what, if any, claims Saatchi may have against the 17 former executives. But employees who are considering leaving their current employer to join competitors or start a rival firm of their own should be mindful of their legal obligations before, during and after their departure and should consult with legal counsel for guidance.
Read more about the Saatchi saga here.
