Earlier this month, Clinton pollster Mark Penn filed a lawsuit asking a Manhattan Supreme Court judge to tell Bloomberg pollster Michael Berland and his friends to stop “engaging in an orchestrated and illegal plot to sabotage” the company both men help found, Penn, Schoen & Berland.
The lawsuit, initiated without fanfare with a request for an injunction on June 14, is the culmination of a dispute that friends, colleagues, and former employees say has been brewing for years, rupturing what was a close and profitable partnership. (Mr. Berland, who recently left the firm, is the nephew of Mr. Penn’s brother’s wife.)
The development also comes just as Mr. Penn’s most high profile client, Hillary Clinton, faces the increasingly imaginable prospect of campaigning for the White House against Mr. Berland’s most noteworthy client, Michael Bloomberg.
The timing hardly seems coincidental.
The prospect of a Bloomberg presidential campaign represents a potential once-in-a-lifetime windfall for Mr. Berland, and for Doug Schoen, a third partner in the firm who worked with Mr. Berland on the mayoral campaign. (Mr. Schoen, like Mr. Berland, recently left the company.)
During his campaign for re-election in 2005, Mr. Bloomberg paid the firm more than $17 million. Mr. Bloomberg’s Presidential pollsters, whoever they might end up being, would stand to earn many times that amount if he ran for president.
The lawsuit, which was formally filed by Penn, Schoen & Berland against Mr. Berland on June, claims that the former partner at the company helped start a rival company, Global Insights and Strategies, which then began poaching PS&B employees and corporate clients.
The move, the suit suggests, would be in direct violation of a non-compete clause Mr. Berland had signed when he left PS&B late last year, and if so, he could stand to lose $11 million of the $16 million he got when he left the company, according to the lawsuit.
The list of corporate clients Mr. Berland allegedly tried to lure away from his former firm include the National Hockey League, Estee Lauder, Qwest and the makers of Blackberry, RIM. In other words, the sorts of mainstay corporate clients that helped push Penn, Schoen & Berland’s revenue to over $30 million by the time it was purchased in 2001 by The WPP Group, an international advertising firm.
It is unclear, as yet, whether the non-compete clause—which, according to the suit, prohibits Berland “from competing with PSB until December 31, 2007, and from soliciting any PSB clients … until December 31, 2008”—would apply to work done for Mr. Bloomberg. Although the Mayor has been a client of the firm, Mr. Penn—and the firm—would be unable to work on a Bloomberg presidential campaign because of his relationship with the Clinton campaign.
If the suit is successful, it would allow Mr. Penn to argue that Mr. Berland (as well as Mr. Schoen, who reportedly has a similar non-compete clause) should be barred from doing any work for Mr. Bloomberg or any other Presidential candidate.
It’s just fine print, but a fortune could hang in the balance.