One Alleged Misconduct Chapter At WPP Ends As Another Begins

For the second day in a row we have a big dramatic news story courtesy of ongoing events at WPP. As you’ve probably seen by now, Erin Johnson, the former chief communications officer at J. Walter Thompson has settled her two-year legal battle with the holding company and agency and the former CEO of the agency, Gustavo Martinez, whom Johnson accused of sexually harassing her.

And, punctuating the finality of the chapter, Johnson resigned from the agency effective immediately. No word on the settlement amount, but given her doggedness (and that of her lawyers) up to this point, I’m guessing it’s a bundle.

A year ago I was wondering why it was taking so long for the JWT sex harassment case to settle. A year before that, when it first began, I would have bet big money on a settlement in six months.

Most cases, after all, do settle—defendants want to put the matter behind them quickly and plaintiffs are usually happy to take as good an offer as they can get, also pretty quickly, and move on.



But by January of this year I was thinking, gee, this case is really going to go the distance: to trial, that is. I’d have bet big money on that happening. And, oh, boy won’t this one be fun to report (!) having seen all the salacious tales of “rape talk,” apple eating and inappropriate touching, not to mention the wild goings on at an off-site JWT gathering that were reported in court documents related to the case.

If nothing else, you now know why I'm not a betting man (even though I think about it sometimes).

The timing of the settlement is extremely thought-provoking. It came one day after WPP confirmed that its board had hired a law firm to investigate an allegation that CEO Martin Sorrell had engaged in personal misconduct and possibly misused company assets.

I wonder if there’s a connection? And the timing referred to above is just the orchestrated timing of the two events. The Wall Street Journal got a tip on the Sorrell investigation and broke the news Tuesday. WPP followed quickly with its confirmation.

How long had the Sorrell investigation been going on, or when was the allegation about his alleged misconduct made? Days ago? Weeks? Hard to know.

Some industry watchers think maybe WPP’s resolve in the Johnson matter dissolved when the latest Sorrell problem emerged. Indeed, if Sorrell’s job is remotely in jeopardy—and to be fair that’s pure speculation at this point—some believe Johnson's case came to be seen as a needless distraction to be dealt with immediately. C'est la vie, Gustavo.

On the other hand, maybe something came up in discovery that ultimately convinced the company it had a lot more to lose by going to trial than by settling, even at this late stage in the game. The legal fees after two years of throwing accusations and briefs at each other must be pretty hefty.  

Either way, Johnson seemed pleased with the outcome.

As for Sorrell, his probe is just getting started. May be a while before we know how pleased or not he is with the result.

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