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March 22, 2005
Ellerbe Becket says the defection of
five key principals from its Kansas City sports architecture
office to rival HOK violated agreements the company had with
its staff and with HOK, according to a lawsuit filed last
week in state court.
Based in Minneapolis, Ellerbe Becket maintains a sports design
office in Kansas City, as do HOK and other firms. Defections
have been common over the years, but none ever involved five
principals. The two firms are working as members of a team
designing a new arena in Kansas City, and that fact is crucial
to the dispute.
The lawsuit asks a judge in Kansas City to impose damages
and issue a court order stopping the five defectors from using
confidential information or interfering with Ellerbe’s
clients and employees. It charges the five with breach of
contract, interference with a contract and breach of fiduciary
responsibility.
According to the lawsuit, all five signed fair dealing agreements
on accepting employment. The agreements say that the employee
will not solicit clients or other Ellerbe employees if they
are terminated, the lawsuit claims.
A handshake agreement made over the arena project also prohibited
solicitation, Ellerbe claims.
HOK officials could not be reached for comment. Michael
Katz, an attorney for Ellerbe, declined to comment while the
matter was still in court.
According to the lawsuit, St. Louis-based HOK first secretly
negotiated with David J. Orlowski, the head of Ellerbe Becket’s
Kansas City office and chief of sports architecture. The other
employees involved, Brad A. Clark, Michael R. Clay, Stephen
F. Hotujac, and Michael W. Sabatini, were recruited shortly
afterward, the lawsuit claims.
Last October, Ellerbe and HOK started work on the new Kansas
City arena project, a collaboration that put the two staffs
in close contact, claims Ellerbe. The two firms and “other
firms involved in the project agreed that each firm would
not employ or solicit to employ any employees from the other
firms working on the project, says the lawsuit. Nothing was
put into writing, however, and the lawsuit suggests the agreement
was sealed with a handshake.
Another section of the lawsuit says Ellerbe’s staff
was bound by terms of its employment agreements. Under the
terms of their fair dealing pacts, Ellerbe’s employees
must refrain from contacting existing and prospective Ellerbe
clients and from contacting another Ellerbe employee about
leaving the staff, the lawsuit says.
After secretly negotiating with Orlowski, HOK’s “raid”
grew to include Clark, Clay Hotujac and Sabatini, the only
other principals in Ellerbe’s Kansas City office and
leaders of the sports practice, claims Ellerbe. Clark, Clay,
Hotujac and Sabatini were principally involved in marketing,
maintaining client relationships and management. Prior to
March 3, they stopped pursuing new work for Ellerbe, the firm
charges. An additional Ellerbe Becket employee was also persuaded
to join HOK.
After the web site of a trade publication reported the defections,
competitors, clients and the public became aware of the defections
and “the full extent of future losses is impossible to
measure at the present time,” claims Ellerbe.
Richard Korman,
for enr.com
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