Two marketing executives conducted an extramarital affair, at times at company expense, and sought jobs from an advertising agency they were supposed to be evaluating, giving Wal-Mart plenty of reason to fire them, the world’s largest retailer argued in a court filing.
Bentonville, Ark.-based Wal-Mart Stores Inc. terminated Julie Roehm and her subordinate, Sean Womack, in December. It then canceled a deal the two had negotiated with advertising firm DraftFCB and reopened its search for an agency to handle its $580 million in advertising spending for this year.
Ultimately, Wal-Mart selected Interpublic Group’s Martin Agency as its ad firm. DraftFCB is also a division of Interpublic.
Roehm filed suit Jan. 10, claiming she was wrongfully terminated. Monday, Wal-Mart filed a counterclaim accusing Roehm of having an affair with Womack and of seeking gifts and otherwise showing favoritism toward an agency that was campaigning for Wal-Mart’s account.
“When we fired Ms. Roehm, we had no intention of sharing the details of her personal and professional misconduct even as she made disparaging the company a centerpiece of her self-promotion campaign,” Wal-Mart spokeswoman Mona Williams said.
“Now we must respond to her lawsuit. We are in a position where we have no choice but to share the real story of what happened,” Williams said.
Roehm’s lawsuit and Wal-Mart’s counterclaim are in federal court for Southern Michigan.
The filing describes Roehm as sitting in the lap of DraftFCB executive Tony Weisman and eating from his plate during a dinner for advertising consultants, at a time when DraftFCB was working to win the Wal-Mart contract. The firm indeed won the account, but was stripped of it days later after Wal-Mart fired Roehm and Womack.
Wal-Mart cites e-mails between Roehm and Womack that the company says show the two had an affair. The two arranged for company-paid travel so they could be together, Wal-Mart claims, adding to the overall inappropriate nature of the relationship. The company says it does not allow fraternization between a boss and a subordinate.
There was no answer Tuesday at a Bentonville telephone number for Roehm and a message left with a Sean Womack residence in Bentonville was not returned.
Wal-Mart says Roehm’s conduct with DraftFCB was improper and cites e-mails that detail gifts of expensive vodka that Draft FCB sent to Roehm by the case and expensive meals paid for by DraftFCB. Roehm and Womack allegedly sought employment with DraftFCB as the firm competed for the Wal-Mart advertising contract, Wal-Mart says.
In an e-mail Wal-Mart said was from Weisman to DraftFCB chairman Howard Draft, Weisman suggested sending Effen vodka to Roehm, noting “she put away a bottle” during one night out.
“She (Roehm) doesn’t seem troubled by the gift restriction policies,” Weisman continued.
Phillippe Krakowsky, a spokesman for Interpublic, said it provided the e-mail correspondence at Wal-Mart’s request.
“That request was made and we honored it,” Krakowsky said.
After DraftFCB was awarded the account, two employees used Wal-Mart’s open-door policy to complain about Roehm’s relationship with Womack and her conduct during the competition. Wal-Mart investigated and fired the two executives Dec. 4. Wal-Mart reopened its search for an ad agency, banning DraftFCB from consideration.
Roehm has denied having an affair with Womack, though the company cites instances in which she acknowledged the relationship.
“Roehm and Womack’s improper conduct, favoritism and receipt of gifts and gratuities harmed the company’s image by creating and appearance that Wal-Mart’s $580 million advertising budget would be awarded based on personal considerations, connections and favoritism rather than on efficiency, sound business judgment and the best interests of the company,” Wal-Mart said in the filing.
The company also claims that Roehm supplied DraftFCB with highly confidential Wal-Mart sales information and advised the firm on how to structure its proposal to maximize what Wal-Mart would pay, contacts Wal-Mart described as “disloyal” discussions.
Wal-Mart is seeking damages that would be determined at trial, plus costs and attorney fees.
“Rather than serve as a model for company employees, she flouted express Wal-Mart policies, not to mention basic principles of corporate ethics,” Wal-Mart said in the filing. “She and Womack were terminated for violating their fiduciary duties as Wal-Mart officers and clearly established corporate standards of conduct.”
The filing states that executives are held to a higher standard because they shape the company’s image and its future and control its assets.