Last week, I wrote a story about Mark Penn, Hillary Clinton’s pollster and close political advisor, and his former business associates. As I noted earlier, Penn is suing his former business partner Michael Berland, and several other former employees of their company, Penn, Schoen & Berland, for setting up a rival consulting company, allegedly in violation of a non-compete clause in their contracts. Berland and the other defendants are accused of trying to woo away Penn’s corporate clients, but the suit also has political implications, because Berland and another recently departed partner, Doug Schoen, have worked for Michael Bloomberg before, and would presumably be on board for a presidential campaign should the mayor decide to run. That is, if the non-compete clause allows them to.
In mid-June, Penn filed a suit in federal court in Manhattan. (Here’s a pdf.) His complaint quoted from several incriminating-sounding emails sent by Mitchell Markel, a former Penn employee who went to work with Berland, in which he purportedly touted his new business to competitors (“That’s why global insights and strategies (my new company) will be a success–because I will do good quality quant [research]”) and plotted to woo big-dollar clients away from Penn’s firm. According to Markel’s lawyers, 18 of the emails were appended to the complaint as exhibits, though when I checked at the federal courthouse today they were missing from the case file.
Shortly after obtaining a temporary restraining order that prevented Berland and Markel from conducting business, however, Penn dropped the federal suit and refiled his complaint in state court. This time, the email exhibits were not included.
Six days ago, as the AP first reported, Markel filed a countersuit claiming that Penn had violated federal wiretapping laws by stealing “a minimum of 154” of his emails. According to the countersuit (here’s the pdf), after Markel left the company, an employee of Penn’s firm allegedly “somehow rigged” Markel’s private Blackberry or Cingular account to send a blind cc of “every single email Markel sent from his Blackberry at the moment he sent them.” The emails were allegedly forwarded to a dummy gmail account that Penn’s firm had access to, and included private correspondence about family matters and medical information. According to the suit, someone at Penn’s firm accessed and tampered with Markel’s Cingular account as late as June 26–long after the first lawsuit was filed, and the day before my story came out, bringing the case to public attention.
(Ironically, one of the clients Penn accuses his former associates of trying to lure away is RIM, the company that makes … the Blackberry.)
I’m waiting on a comment from Penn’s people. His lawyer, Howard Rubin, told the AP: “The company hasn’t done anything improper, and the e-mails came in on our own e-mail account.”
Ben speculated yesterday that the countersuit may be a defense tactic to embarass Penn and force a quiet settlement. I’m not an employment lawyer–though I am going to be talking to some as I continue to follow this case–but I suspect that if the timeline and circumstances of the alleged hacking are as the Markel portrays them (if, that is, it began after he quit and if it was indeed his personal property involved), there could be a real issue here. At the very least, this is a cautionary tale for anyone who’s thinking about quitting their job to work for a competitor: Change your passwords.
I’ll be continuing to follow this case, of course.
UPDATE: Penn’s spokesman declined to comment, adding that Rubin’s statement to the AP still stood.