4:55pm PT by Matthew Belloni, Austin Siegemund-Broka
CAA Sues UTA and Two Agents for a "Lawless Midnight Raid" (Exclusive)
On the heels of the exit of 10 Creative Artists Agency agents to United Talent Agency, CAA has filed a massive lawsuit against its rival and two of the defecting agents for what it calls a "lawless midnight raid."
In the suit filed Thursday in Los Angeles Superior Court, a copy of which was obtained by The Hollywood Reporter, CAA alleges seven causes of action, including claims of intentional interference with contractual relations against UTA and claims of breach of fiduciary duty and breach of the duty of loyalty against agents Gregory Cavic and Gregory McKnight, both of whom worked for CAA for a decade before abruptly jumping ship to UTA.
In the filing, CAA alleges Cavic and Knight were not under contract to CAA but "while still on CAA's payroll and while still accepting generous compensation and benefits from CAA, worked clandestinely with each other and UTA to induce a number of CAA employees to abruptly terminate their employment with CAA to join UTA. At least three of the employees whom UTA, Cavic, and McKnight induced to leave CAA had entered into enforceable, ongoing contracts with CAA."
That allegation is key to the interference with contract claim and is a reference to former CAA comedy department agents Jason Heyman, Martin Lesak and Nick Nuciforo, all of whom were under contract to CAA when they bolted for UTA, the suit claims. Those agents are not defendants in the lawsuit, but sources tell THR that a separate arbitration proceeding for breach of contract will be initiated against them in the next day or two because their contracts with the agency included clauses calling for arbitration.
In one of the biggest agency shifts in years, the defecting agents left CAA on Tuesday and took with them major clients including Will Ferrell, Ed Helms and Chris Pratt, and the lawsuit claims Cavic and McKnight are to blame because they "solicited existing and prospective CAA clients on behalf of UTA while still employed by CAA; delayed meetings and deals with existing and potential CAA clients in order to make it more likely that they would complete such deals after leaving CAA and becoming partners at UTA with the intent to divert as much of CAA's business to UTA as possible," and encouraged clients to avoid or alter their relationships with CAA in anticipation of the move to UTA.
The suit claims that Cavic and McKnight's improper recruitment of Heyman, Lesak and Nuciforo began in January or even before, "with the deliberate intent to divert CAA's employees and to disrupt CAA's existing and prospective client relationships and business opportunities." Specifically, the complaint alleges that Cavic and McKnight proposed that CAA clients at the Sundance Film Festival in late January co-sign deals with UTA. If true, that would support a claim that the duo and UTA conspired to harm CAA and interfere with the contracts of the three other defecting CAA agents.
UTA and the other defendants declined to comment.
Damages are not alleged but they could reach into the tens of millions of dollars depending on how many CAA clients end up joining UTA with their agents. The defecting roster currently comprises Cavic, McKnight, Heyman, Lesak, Nuciforo, John Sacks, Susie Fox, Joanna Scott, Mackenzie Condon and Chelsea McKinnies. Punitive damages and legal fees also are requested.
CAA, represented by prominent employment litigators Anthony Oncidi and Keith Goodwin of Proskauer Rose, alleges causes of action for international interference with contractual relations, intentional interference with prospective advantage, breach of fiduciary duty, conspiracy to breach fiduciary duty, breach of duty of loyalty, conspiracy to breach duty of loyalty, and unfair competition.
Without a court intervention, CAA claims it will "continue to suffer from the diversion of profits, clients, business opportunities, and/or other CAA employees, and continued damage to its business reputation."