The Appellate Division of New York State Supreme Court has rejected an appeal of a lawsuit by former Interpublic Group executive Ray Volpe that contended he was entitled to more than $300 million that IPG earned from an early investment in Facebook. The ruling was handed down earlier this week.
Volpe, a former IPG account executive, sued IPG in 2012, contending that he struck an “oral agreement,” with the holding company that entitled him to the profits on the company’s initial $2.5 million investment in Facebook. That investment, part of what was termed a “strategic alliance,” was made back in 2006.
IPG sold its Facebook stock over a period that spanned 2011-12, earning a profit of $380 million. Volpe contended that IPG CEO Michael Roth agreed to a deal via email that gave Volpe and Howard Draft (founder of Draft, now part of IPG's FCB) rights to all profits on the block of Facebook shares. That agreement was allegedly in exchange for guaranteeing that clients would buy a minimum amount of Facebook advertising, spending supposedly agreed to when IPG made its initial Facebook investment.
IPG denied it ever agreed to such a deal. But even if it did, the company argued that Volpe’s compensation terms were clearly spelled out in a written “Final Employment Agreement” that didn’t mention any bonuses or other payments linked to the Facebook investment.
In a decision issued last August, New York State Supreme Court Judge Eileen Bransten agreed with IPG’s interpretation, calling Volpe's claims, "vague, conclusory and contradictory," as she dismissed the suit. Volpe appealed last fall.
In its ruling this week, the Appellate Division ruled unanimously that Judge Bransten correctly tossed the case. “The motion court properly dismissed plaintiff’s complaint in its entirety,” the decision states. “The terms of plaintiff’s employment agreement bar his claim for breach of a side deal, as well as his ancillary claims, and plaintiff’s conclusory allegations are insufficient to state a claim for breach of the employment agreement.”
Commenting on the appeals ruling, IPG stated, “We are pleased that the appellate court has agreed that this case should be dismissed. From the start, Mr. Volpe’s claims were completely without merit, as the lower court had indicated in its earlier decision.”
An attorney for Volpe didn’t respond to a query for comment.