A U.S. District Court judge refused to grant ICM’s request for a temporary restraining order that would have prevented Richard Abate from leaving the agency to start a literary division at rival Endeavor until his contract expires at year’s end.
Judge Peter K. Leisure rendered his decision Wednesday, following two days of sometimes-heated testimony from Abate and his former ICM colleagues, Esther Newberg and Sloan Harris, the co-heads of the agency’s publications department.
The judgment doesn’t end ICM’s legal efforts against Abate. The agency said it will proceed with arbitration seeking $10 million in damages.
While agencies often come together to settle these kinds of disputes, this conflict got a bit more personal.
Though they were rumored to have discussed a merger within the last year or so, ICM and Endeavor have had a contentious history going back to when rising ICM agents Ari Emanuel, Tom Strickler, Rick Rosen and David Greenblatt carted off their files in a station wagon late one night and hatched Endeavor the next day. There is also a high level of acrimony between ICM and its former employee Abate, as evidenced by the percentery’s reaction to the judge’s decision.
“We are disappointed with the court’s decision,” said ICM general counsel Richard Levy, who was by the side of lead attorney Michael Weber during the hearing. “However, on behalf of our clients who rely on our efforts to protect their privacy and enforce the integrity of their contracts, Richard’s blatant misconduct compelled us to act. The final outcome now will be determined by an arbitrator.”
Abate’s attorney, Brian S. Kaplan, said his client was grateful to be able to get back to work.
“My client is extremely pleased with the court decision,” he said. “Richard looks forward to continuing to work on behalf of his clients.”
It was clear from Judge Leisure’s written decision that the law sets a high bar for granting a temporary injunction. Though ICM claimed it would be irreparably harmed by Abate’s defection, the judge ruled that the agency hadn’t established sufficient grounds to justify the injunction.
Abate spent two days on the stand, defending himself against charges that, weeks before leaving on Feb. 9, he had arranged the details of his new Endeavor post in conversations with Nancy Josephson, a former ICM agent who was fired when the agency acquired Broder Webb Chervin Silbermann and then moved to Endeavor.
ICM claimed it had “smoking gun” evidence that Abate engineered his move while under contract and that he’d walked off with confidential files and trade secrets. Abate spent most of his testimony trying to rebut those claims.
At one point during testimony, Judge Leisure admonished Abate for his inability to remember specifics. But the judge indicated in his written opinion that he accepted Abate’s explanations for taking his Rolodex, book proposals and a box of old contracts, writing that Abate did not appear to have tried to usurp any deals he’d made while at ICM.
“ICM has not demonstrated that Mr. Abate has misappropriated or is likely to misappropriate any of its confidential customer information or trade secrets,” the judge wrote. “Thus, it has not demonstrated that it faces imminent, irreparable harm absent an injunction prohibiting Mr. Abate from disclosing any such information or using it for Endeavor’s benefit.”
The hearing could amount to a dry run for the case ICM will make before an arbitrator, when it will likely hit Abate on the same points and seek monetary damages. Abate himself has been somewhat insulated financially, admitting in court that Endeavor has been paying his legal bills in the dispute.
But ICM’s legal pursuits may have an unintended consequence: The publicity surrounding the dispute has heightened Abate’s profile in the business, as well as that of Endeavor’s fledgling lit division.
According to Abate’s testimony, he started in a conference room at Endeavor’s W. 57th Street headquarters and has been working from a computer that sits atop a filing cabinet.
The judge’s ruling allows for Abate to return to his makeshift workspace, where, according to his testimony, 48 of his 50 author clients have pledged to follow him.