Sorrell hires Penthouse lawyer to investigate claims

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WPP has hired a lawyer who once defended the owner of Penthouse magazine to investigate accusations of racist and sexist behaviour by one of the group’s top American advertising agency chiefs.

Gustavo Martinez, chief executive of J Walter Thompson, is the subject of a lawsuit filed by Erin Johnson, the advertising company’s former communications director, who alleges that he made “an unending stream of racist and sexist comments as well as unwanted touching and other unlawful conduct”.

The suit alleges that Mr Martinez spoke openly with other JWT employees, including senior executives, to his dislike of the “f***ing Jews”, and refused to go to places where he would encounter “black monkeys” or “apes” and that he publicly asked which female staff member he should rape.

Mr Martinez has rejected Ms Johnson’s allegations as being false and “outlandish”.

Sir Martin Sorrell, chief executive of WPP, has appointed Bettina Plevan, a partner at Proskauer Rose, to investigate the allegations. The New York firm has represented the main US sports leagues and has acted for clients in the music industry, including Madonna, U2 and Sting.

Ms Plevan has a strong record in sexual harassment cases. While representing Bob Guccione, the owner of Penthouse, she successfully had a decision to award $4 million to Marjorie Lee Thoreson, a former “Pet of the Year”, reversed on the basis that no punitive damages were available under the state human rights law.

Ms Plevan, known as Betsy and one of the most prominent female lawyers in the United States, has extensive experience in employee benefits, harassment and discrimination cases. Her appointment was revealed after Sir Martin emailed WPP’s leadership team about developments in the case. WPP declined to comment further. It has also retained Finsbury, one of its public relations businesses, to handle the situation.

An amended lawsuit was filed this week to ask permission to submit a video into evidence of Mr Martinez speaking at an event in Miami that could strengthen the case against him.

JWT has said that it takes the allegations “very seriously”.

Mr Martinez, who remains in his role, holds a doctorate in economics. He was born in Argentina but grew up in Spain and is recognised as the first Hispanic chief executive of a global advertising agency. He joined JWT in 2014, having joined from McCann Worldgroup, where he was president of Europe and Asia. Before that he worked at Ogilvy, another WPP subsidiary.

Ms Johnson, who joined the agency in 2005 and was promoted to the role of chief communications officer in 2008, is on paid leave.

J Walter Thompson was founded in 1878 and is one of the most famous names in advertising, as it formed long-term relationships with brands including Prudential, Kraft, Nestlé and Unilever. Modern campaigns include the Andrex puppies and HSBC’s global campaign familiar to travellers who use Heathrow.

The US agency was the first big acquisition made by Sir Martin after he formed WPP Group in 1987 and became the platform for a series of acquisitions that transformed the British business into the world’s largest advertising and marketing company.

WPP said this week that Sir Martin’s remuneration this year would include shares worth £62.8 million, making for a total package that is likely to exceed £70 million, including cash bonuses.