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Ogilvy’s Whistleblower: Avon, Over Billing + A Lawsuit

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Update: Ogilvy has sent us the following statement: “At the time of the allegations, Ogilvy’s Chief Ethics Officer and Internal Audit did a thorough investigation of the claim and found no wrongdoing. The complaint was filed with the Department of Labor which dismissed it in its entirety. The case was then filed in Federal Court. Ogilvy has moved to dismiss the case as the allegations are without merit. We do not comment on ongoing litigation.”

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Lisa Steiman was an Sr. Partner executive producer at Ogilvy. Now, she’s filed a lawsuit against the company WPP and Ogilvy. As well, a host of other high ranking Ogilvy staffers – both past and present – are mentioned in the filing. The lawsuit was filed on December 31, 2008 and contains elements of whistle-blowing, as well as alleging wrongful termination. Download the PDF of the claim.

Ms. Steinman began her employment with Ogilvy in April 1996. By 2001, she had risen to be a Senior Partner, which is damn hard to do. She reported to the highly accomplished Lynn Roer, the Director of the Broadcast Department.

Ms. Steiman claims that Ogilvy asked her to take charge of the Avon account in 2007, “due to Avon’s dissatisfaction with Ogilvy’s prior performance on this account.” Apparently, there were two incidents that led to their unhappiness: a reshoot of a broadcast spot at the agency’s expense and unhappiness with the Christian Lacroix/Avon perfume campaign. In this latter case, Avon had selected a photographer, Javier Vallhonrat, to shoot the spot, but allegedly pulled out for a lower priced competitor. Vallhonrat ended up threatening to sue, so Ogilvy paid him $25,000. The agency asked Avon to help cover the cost of this mishap, but the client refused.

At this time, Ms. Steinman alleges that Roer “directed Steiman to engage in fraudulent billing as part of an attempt to pass the cost of the $25,000 settlement onto Avon.” The lawsuit claims that: “Prior to August 2007 – when Ms. Steiman told Ms Roer that she was not comfortable with billing Avon $25,000 through Eyepatch Studios and misrepresenting that the charge was for the music composer, when his services only cost $10,000.”

Still, Ms Roer supposedly insisted. “This way, Defendants [Ogilvy] would fraudulently pass on to Avon $15,000 of the $25,0000 Vallhonrat Settlement, even though Avon had expressly refused to pay that cost.” At this point, the lawsuit claims that Steiman invoked the memory of the Shona Seifert and Thomas Early case, where the two ad execs were nameed for overbilling the Office of National Drug Control Policy in 2005. No matter. Roer allegedly continued to persist.

On August 16, 2007, Steiman visisted Roer and said she was not comfortable. She couldn’t do it. Ms. Roer is said to have said: “Well, it’s not like we were doing anything wrong; I was just putting a mark-up on it.” Oh yes… we have all heard that logic at one point another in this business.

This is where Steiman says that Ogilvy began to retaliate against her by “marginalizing her, removing her from accounts, not allowing her to work on accounts” as well as giving her inaccurate poor performance reviews. She was removed from the Avon account by October 2007. Steiman sought intervention from higher ups such as Steve Hayden Vice Chairman of Ogilvy. It is unclear what action was taken.

Around this same time, Jeff Curry, Ogilvy’s Creative Director on the Minute Maid account requested that Steiman be assigned to work with his team. In January 2008, Roer allegedly pulled her from the account. Mr. Curry “expressed shock and anger.”

This cycle suppsedly continued. Steiman went to Carlene Zanne of human resources and Joe Panetta of the Ethics Department in January 2008. At this time they asked if she was aware of any other unethical practices. “Ms Steinman brought up the issue that Ogilvy is a Screen Actor’s Guild signatory, which means it is contractually obligated to use SAG talent.” However, on a job for Six Flags, they did not. Weird detail, right? On January 12, 2008, she was removed from the Six Flags account again, supposedly by Ms Roer. On April 2, 2008 she was fired.

Now, Lisa works at Google (very cool). Avon, as of February 2008, selected Kirshenbaum Bond & Partners to handles its fragrances. The company still works with WPP owned and Ogilvy partner company Soho Square, which offers integrated marketing services.

More: Lars Bastholm Jumps To Ogilvy

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