WPP WPP PLC

By Alexandra Bruell and Suzanne Vranica 

WPP PLC has settled a lawsuit brought by an employee that alleged racist and sexist behavior by a top executive at one of the advertising giant's premier agencies, ending a legal dispute that helped raise awareness about inappropriate behavior on Madison Avenue.

Erin Johnson, chief communications officer of the WPP-owned agency J. Walter Thompson, is receiving a substantial settlement, a person familiar with the matter told The Wall Street Journal, which first reported news of the agreement Wednesday.

In her 2016 lawsuit, Ms. Johnson alleged that JWT's then-chief executive, Gustavo Martinez, engaged in a pattern of misconduct that amounted to gender discrimination and a violation of her civil rights.

In a statement, JWT confirmed it had reached the settlement and declined to disclose the terms. The company said Ms. Johnson has resigned from her role at the agency.

Shortly after Ms. Johnson filed the lawsuit, Mr. Martinez left his post as CEO of JWT. A WPP spokesman said Mr. Martinez is currently working on assignments in Spain for WPP.

Ms. Johnson said in statement, "The past few years have been challenging to say the least, and I am grateful for the love and encouragement from family, friends and those of you in the industry who spoke up and offered support." She added, "I hope that my personal experience will encourage others to speak up and follow their convictions."

News of the settlement comes as WPP's board is investigating allegations of personal misconduct by the company's chief executive, Martin Sorrell. The Wall Street Journal reported Tuesday that the board is looking into whether Mr. Sorrell misused company assets. The company confirmed it is investigating Mr. Sorrell, who has denied any misconduct.

Madison Avenue has struggled to move beyond the perception that the advertising world is hostile to women and lacks diversity. Ms. Johnson's case helped reignite debate over workplace behavior in the industry -- even before the broader #MeToo movement took off. JWT is a storied ad agency whose clients include Macy's, Ford, Kimberly-Clark and HSBC.

Ms. Johnson's lawsuit, filed in federal court in New York, named as defendants Mr. Martinez, JWT and WPP.

It alleged she was subjected to a hostile work environment, and that Mr. Martinez engaged in an "unending stream of racist and sexist comments as well as unwanted touching and other unlawful conduct." The complaint claimed that in conversations with colleagues Mr. Martinez referred to personnel at airports as "black monkeys" and "apes" who don't know how to use computers.

Write to Alexandra Bruell at alexandra.bruell@wsj.com and Suzanne Vranica at suzanne.vranica@wsj.com

(END) Dow Jones Newswires

April 04, 2018 14:16 ET (18:16 GMT)

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