WPP has fired back in a New York Court,
urging it to dismiss a lawsuit brought earlier this year by Neo@Ogilvy planner Audrey Gladitsch. She alleged fraudulent over-billing of client IBM by both Neo and Ogilvy & Mather, and unlawful
retaliation under the "whistle blower" provisions of the Sarbanes-Oxley Act.
WPP and its agencies characterized Gladitsch's assertions as "ludicrous" and unsupported by facts. "Obviously
disappointed in not having received a promotion she did not earn, Gladitsch has twisted the facts and distorted the law in an attempt to turn what she believed was a mistake in billing between a
third-party vendor (not her employer Neo) and one of Neo's clients [IBM]" into a more pernicious and intentional fraud and retaliation scheme, claims WPP's brief.
Back in February, when
Gladitsch first filed her suit, Ogilvy acknowledged that over-billing had occurred with certain digital buys for IBM, due to a "misunderstanding of contract rates" on the part of some vendors. The
shop said the matter was brought to IBM's attention and the matter was rectified with clearer contract language.
In addition, Ogilvy said at the time, the client received credits from all of
the vendors who had overcharged it.
The case is particularly sensitive for Ogilvy. Six years ago, two of its senior executives were convicted of fraud in connection with over-billing the U.S.
government when the agency was handling the Office of National Drug Control Policy account.
In her suit, Gladitsch alleged that the defendants "had, for years been engaging in fraudulent
conduct by subjecting IBM to millions of dollars in overcharges for the services that the company had ostensibly provided."
When she raised the issue, Gladitsch contended, she was threatened by
superiors, denied a promised promotion and ultimately taken off the IBM account. She was subsequently demoted to a position that she currently holds.
WPP argued that the whistle-blower
allegation was invalid because Gladitsch did not raise any actions that constitute "a violation of securities law or fraud against shareholders," which it argued is a must when making a Sarbanes-Oxley
claim.
"At most, she was complaining about a breach of contract and, more likely, merely a billing mistake between a vendor -- not Neo -- and Neo's client," WPP said, adding that even if there
were overcharges, the agencies did not profit in any way by them.
As to the retaliation claim, WPP again argued that because Gladitsch had not made allegations of fraud against shareholders,
she lacked standing to make a claim under Sarbanes Oxley. In order to make such a charge, the holding company said, "a plaintiff must allege that her employer was defrauding shareholders -- not a
client."
Also, WPP argued, while Gladitsch said she "believed the defendants' behavior permitting vendors to overcharge IBM was likely fraudulent ... Gladitsch provides absolutely no factual
support to amplify these beliefs."
Gladitsch has until later this month to respond to the motion to dismiss the case. IBM has not commented publicly on the case, and a rep did not return
queries by deadline.