PepsiCo Gets Doubly Litigious with FCB

05 November 2001

The judge presiding over Cook County Circuit Court in Chicago upheld a plea from PepsiCo that its trade secrets were being jeopardized by talks between its former agency Foote Cone & Belding, Chicago, and arch-rival Coca-Cola [WAMN: 30-Oct-01].

In the wake of losing Pepsi’s $350 million account [WAMN: 24-Sep-01] FCB was set to take on Coke brand Dansani, a head-on competitor with Pepsi’s Aquafina on which FCB had previously worked.

The court accordingly granted a temporary restraining order on four FCB staffers – all of whom had been closely connected with the Aquafina business – banning them from any contact with Coca-Cola until a full hearing of Pepsi’s injunction is heard later this month or early in December. Other FCB employees, however, are not similarly restrained.

Separately, Pepsi-owned Quaker Oats is getting litigious with FCB over its sports drink Gatorade – now handled by Omnicom’s DDB Worldwide.

FCB, eager to replace the lost Gatorade business, has been in discussion with Coke about another of its brands, competing sports brew Powerade. These conversation, Pepsi argues, endanger the security of Gatorade’s “marketing strategy, confidential and proprietary information”.

According to the lawsuit, FCB's global creative director and chairman of its Chicago office, Jonathan Harries, notified Quaker on October 24 that the Powerade business would be handled from Chicago. Quaker then sought assurances that no FCB employees previously employed on Gatorade would work on the rival brand – a request denied by FCB on grounds that “our internal staffing of assignments remain our prerogative and concern”.

Alleges the lawsuit: “FCB is not acting and will not act in good faith to protect Quaker's trade secrets and confidential information.” It then proceeds to charge the agency with “breach of contract, a violation of the Illinois Trade Secrets Act and breach of fiduciary duty”. In addition to the staff restraints and prohibitions, Quaker also asks for unspecified monetary damages “in excess of $75,000”.

And lest cynics believe it to be motivated solely by matters commercial, Pepsi/Quaker sounds the fanfare of public interest: “The American consumer will be advantaged by strong and fair competition in the sports drink category,” the lawsuit trumpets, “and should not be deprived of that competition.”

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