Arbitrators Unanimously Rule Against Interpublic in Action Against Former Lowe and Partners Chairman Marvin Sloves
14 February 2000
Arbitrators Unanimously Rule Against Interpublic in Action Against Former Lowe and Partners Chairman Marvin Sloves
NEW YORK--Feb. 14, 2000--and Awards Sloves Damages
Calling IPG's case "unpersuasive" and "flatly and credibly contradicted" by the evidence presented in year-long arbitration proceedings, a panel of The American Arbitration Association completely rejected a breach of contract claim brought by Interpublic, which charged that Marvin Sloves, the former chairman of Lowe and Partners/SMS, moved the Mercedes-Benz account from Lowe & Partners/SMS to another agency following his retirement.
The panel denied all of IPG's claims after detailed proceedings, which included testimony by IPG Chairman Philip Geier and Lowe Group Chairman Frank Lowe. It found that Mercedes "changed agencies for its own business and strategic reasons" and that "there was nothing Mr. Sloves could have done that would have kept the account at the agency." Mercedes terminated its relationship with Lowe and Partners/SMS (now Lowe Lintas and Partners) in a process of agency consolidation following the merger of its parent company Daimler-Benz with Chrysler in 1998.
"I am delighted by the arbitrators' decision, and very pleased to have been so completely vindicated in this action," said Sloves.
The panel also ruled in favor of Mr. Sloves on his counterclaims against IPG, ruling that Interpublic had breached a contract with Mr. Sloves providing for Mr. Sloves to serve as a consultant to the agency. The panel awarded to Mr. Sloves the full compensation and benefits provided in the contract for his services as a consultant, and also ordered IPG to pay all of the expenses of the arbitration. In addition, the panel requested further briefing on its power to award Mr. Sloves attorney's fees, and ruled that Mr. Sloves "successfully defended himself against IPG's claims and we have found that he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interest of IPG."
IPG has not yet paid the damages awarded by the arbitrators or taken the other actions required by the award. Accordingly, Mr. Sloves has filed an action in court to obtain court enforcement of the award.