New York City to subpoena ad agency execs in diversity probe

By Lisa Sanders
AdAge.com
(March 6, 2006) Madison Avenue’s white management ranks are about to be exposed in public hearings on ad agencies’ minority-hiring practices that could drag industry stars such as Andrew Robertson, Kevin Roberts and Shelly Lazarus -- and their clients -- into an unflattering spotlight. 

'An embarrassment'
Blasting the New York industry’s hiring practices as “an embarrassment for a diverse city,” City Councilman Larry Seabrook said he will call hearings within the next three months and likely subpoena industry executives for a grilling on the subject.

Agencies won’t be the only ones called to testify. “We can ask [clients] for their positions on diversity and how they feel about working with agencies that aren’t diverse,” added Mr. Seabrook.

Shockingly little change
The last investigation of advertising’s minority-hiring practices was undertaken in the early 1970s, when three agencies agreed to implement approved procedures in hiring. But shockingly little has changed since those days, when Gerald Ford was in office and the Watergate perpetrators were being sentenced, according to Mr. Seabrook. In fact, “conditions within the industry have gotten worse,” he said.

The hearings are the latest twist in a year-and-a-half-long investigation by New York City’s Commission on Human Rights, spearheaded by Human Rights Commissioner Patricia Gatling, that has put under the microscope 17 of the city’s agencies, including BBDO, Saatchi & Saatchi and Ogilvy & Mather. On Feb. 14, Ms. Gatling welcomed help from the City Council civil-rights committee that Mr. Seabrook chairs to further the probe.

The city’s Human Rights Commission’s jurisdiction includes the ability to prosecute discrimination based on race, creed, color and national origin in employment and various other areas. Those found to have violated the law face fines as well as other penalties.

Under the City Council’s post-election organization, the civil-rights committee’s status has been upgraded to full-standing status, giving it power to hold hearings, which Mr. Seabrook said he intends to “fast track.”

Allegations of violations
So far, 17 agencies -- some with more than 1,000 employees and others with a quarter of that—have been embroiled in the inquiry that began in November 2004 as a fact-finding exercise. Letters were mailed to nearly 20 agencies requesting data on the number of staffers employed in various categories, with a breakdown of employees by race in each category.

The catalyst was allegations that agencies were in violation of New York City human-rights law. By May of last year, the fact-finding was upgraded to an investigation. Many of the agencies have sought counsel from outside attorneys, including Howard Rubin of Davis & Gilbert, Jonathan Sulds at Akin Gump and Edward Hernstadt at Frankfurt Kurnit Klein & Selz.

Following the requests for data, the commission and attorneys representing agencies have had conversations about how to address the issue of hiring and retaining minorities. One attorney representing several large agencies said that discussions continue “on how the agencies can seek to attain the same objectives the commission is trying to—that is, to find the most reasonable way to proceed toward increasing the number of minorities in ad agencies.”

Possible agreement discussed
Another executive familiar with the matter said at one point the commission asked one of the agencies involved whether it would be willing to accept a “vague, general” agreement on hiring a particular of number of minorities. The agency wanted more information on the possible agreement before committing, but got none.

A third executive said that last fall the commission presented a plan to agencies that would have required them to reach established goals on hiring, promotion and retention, but no agency agreed to it. The commission will not comment on the talks.

Neither the commission nor attorneys representing the agencies will comment on the particular sticking points to reaching a resolution.


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