ATLANTA: After months of drama, Cohn & Wolfe and upstart Titan
Network last Wednesday settled their lawsuit out of court.
The resulting pro forma agreement falls directly in Titan's favor. It
does not award C&W any monetary damages, nor does it hold Titan
accountable for staff losses C&W incurred when Titan set up shop days
after its founders were terminated from their senior positions at C&W
(PRWeek, January 8).
While the final terms were being drafted at press time, both parties had
agreed to go back to their mutual corners and put the matter behind
them. Titan agreed to standard obligations of not soliciting C&W
clients, not recruiting employees from C&W's Atlanta office and not
using or disclosing confidential information belonging to C&W.
C&W CEO Steve Aiello explained what, if anything, his agency gained with
this settlement. "The remedy is that they cannot solicit or hire any
more employees," he said. Regarding financial reparations, Aiello said
none would be sought "unless they violate this agreement."
By settling in this manner, C&W essentially vindicated Titan of its
claims of gross business violations.
Since the agreement includes a "nondisparagement" clause, neither party
was willing to speak much beyond the terms of the settlement. However,
when asked whether in hindsight he should have disclosed his plans weeks
or months earlier when he was first discussing plans and organizing with
his partners, Tony DeMartino, C&W's ousted CEO and head of the new
network, said: "Earlier is a relative matter. If I had gone to Cohn &
Wolfe and said I was going to resign, what's the difference if I had
done it then or if I had done it earlier?"
Titan's victory may now affect the ease with which employees defect one
company to start up a competitor and raises questions of how an agency
can protect itself from such actions. Atlanta business transaction
attorney George Menden of Menden & Freiman said that although Georgia
courts do not favor nondisclosure and noncompete agreements, they will
uphold them - but only if strictly construed.
"If ten guys want to leave an agency, they are free to do that," Menden
said. "And if there are no (binding) agreements in place, they can
solicit clients and employees. This is America and competition is a good