Yahoo News UTA Loses Bid to Keep Lawsuit Over Michael Kassan Exit In Open Court
Ahead of an expected appearance at Cannes Lions next month, Michael Kassan has prevailed in his bid to move to arbitration a lawsuit from UTA looking to block him from setting up a new venture after his messy exit from the agency.
Los Angeles Superior Court Judge Kerry Bensinger, in an order issued on Thursday, found that Kassan and UTA “did not exempt from arbitration” a claim that the company filed asserting that he’s barred from competing with MediaLink or from soliciting its employees and clients.
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In a statement, UTA said its focus is “on supporting the great work MediaLink has always done and continues to do on behalf of its clients, and we look forward to unlocking new opportunities together.” It added, “We will continue to pursue this matter through legal channels and are confident that the facts will prevail.”
On the ruling keeping the case out of open court, Sanford Michelman, a lawyer for Kassan, said that “UTA broke its own arbitration agreement, just like it broke” his client’s contract.
“Kassan waived his severance which gives him the right to compete and UTA’s attempt at trying to damage him in public with these frivolous charges has failed,” he continued.
The legal war erupted in March, with Kassan claiming that he resigned from UTA after being lied to about his responsibilities and privileges and the agency saying it fired him for misusing company funds. In an arbitration action initiated by Kassan against UTA naming chief executive Jeremy Zimmer, he alleged that UTA fraudulently induced him to agree to a sale of MediaLink “only to then walk back the very promises made” regarding what he would oversee at the agency and allowances for his special expenses budget. He resigned on March 6, allegedly preempting the agency terminating him the next day.
UTA sued, accusing Kassan of treating company money as a “personal slush fund.” It amended its complaint shortly after to drop claims for fraud and breach of contract, electing to litigate them in arbitration, but kept a sole claim for injunctive relief.
The issue revolves around whether Kassan has to honor a noncompete clause. He argued he provided “good reason” when he exercised his right to terminate his contract and isn’t bound by its restrictions. A day after Kassan stepped down, UTA purported to terminate him for “cause.”
Agreeing with Kassan that the case doesn’t belong in open court, Bensinger concluded that there’s “no dispute an arbitration agreement” covers UTA’s claim.
Under the so-called partner service agreement, Kassan agreed to “submit to final and binding arbitration of all claims, disputes and controversies arising out of, relating to or in any way associated with my employment or its termination.” Another section of the agreement notes that the arbitration agreement is “intended by the parties as a complete and exclusive statement of the terms” and “supersedes and replaces all prior or contemporaneous oral or written negotiations or agreements on the subject.”
The court rejected arguments from UTA that there was a carveout in the agreement for a claim of injunctive relief.
“As the agreement directs, Plaintiffs must arbitrate their claims against Defendants and may seek injunctive relief in the arbitral forum,” the order stated.
UTA continues to pursue claims in arbitration, as does Kassan.
Kassan has confirmed that he plans to attend Cannes Lions International Festival of Creativity, where he could announce a new venture rivaling MediaLink.
In March, Kassan also sued UTA’s lawyer, Bryan Freedman, for defamation. The MediaLink founder accused Freedman of trying to tarnish his reputation the direction of UTA in a bid to prevent employees and clients from following him to his next venture.
The filing of the lawsuit followed UTA withdrawing some claims against Kassan after it filed a complaint in court rather than in arbitration. Kassan sent Freedman a letter threatening sanctions if he didn’t dismiss the lawsuit.
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