News America Marketing Forces Whistleblower Into Bankruptcy

Robert Emmel, the former News America Marketing account director who alleged in federal court that his old employer bilked its clients by taking payments for hundreds of ad placements that never occured, has filed for bankruptcy.

The filing comes after News America won a summary judgment against Emmel in a breach of contract lawsuit. In that suit, News America sued Emmel for turning over its corporate documents to the Senate Judiciary Committee. Emmel believed the documents described illegal conduct at the company.

The bankruptcy appears to be Emmel’s attempt to protect himself from News America. BNET reported back in March that the summary judgment that triggered the bankruptcy:

… is chilling for employees of ad agencies and marketing firms who discover that their company is engaged in potentially illegal acts.

Daniel Low, the CPG lawyer and author of the Consumer Goods and Retail Industry Litigation Blog, agrees:

… whistleblowers should be provided positive incentives for reporting wrongful activity, not punished for doing so. While corporations like News America have legitimate concerns about avoiding the disclosure of trade secrets and other confidential business information, those concerns do not apply to disclosures to governmental authorities.

In a recent trial, Emmel was a witness for Floorgraphics Inc., which sued News America alleging that the company had engaged in anticompetitive practices to keep it out of certain supermarkets.

Emmel testified that News America took money from clients to place ads in hundreds of supermarkets that had gone bankrupt or had been closed; that the company maintained a “stores not called on” list and a “do not pay list” of supermarkets where News America allegedly kept revenues from clients even though no ads were placed; and that a “freeze” policy maintained by News America kept lists of its vendor supermarkets frozen in time so they appeared to clients to be available for in-store ads when in fact they were no longer in business.

• See BNET’s previous coverage of the in-store marketing wars:
• News America Marketing Whistleblower: Clients Were Charged for Ads That Never Appeared
• Was N.Y. Post’s Carlucci the Reason for News America Marketing’s Settlement With Floorgraphics?
• News America Marketing’s Alleged Plans to Seize Safeway Account Outlined in Suit
• Valassis to Stick With “Majority” of Newspapers; Settles Fraser Billing Dispute
• Valassis, Insignia Stock Jumps on News America Marketing Group Settlement
• Valassis CEO Got Big Raise Despite Company’s Losses
• News America Marketing Group Wins Summary Judgment Against Whistleblower Robert Emmel
• News America Marketing Group Buys Floorgraphics Just Hours After Settling Spying Lawsuit
• News America Marketing Group Settles With Floorgraphics; Valassis, Insignia Likely Rejoicing
• Valassis May Not Be Able to Pay Debt; Litigation May “Materially Harm” the Company
• Trial: Did News America Marketing Group Break Into Floorgraphics’ Computers?
• Valassis Stock Threatened With De-listing by NYSE
• Valassis’ Plan to End Newspaper Coupons Outrages Middle America
  
• Valassis Suit vs. News America Being Conducted in Secrecy
  
• Valassis: Layoffs Will Continue as It Reduces Newspaper Coupon Business; It’s All News America’s Fault
• Valassis Writes Down $245 Million in Assets; Legal Bills Running at 10% of Profits
  
• Valassis Angers Blogger Moms by Yanking RedPlum Coupons From Newspapers
• Valassis Reduces the Cost of Fun for Employees
• Direct Mail Giant Valassis Is “Not Paying Its Bills”; Stock Is “Worth $0”
• The Cost of Valassis’ Suit vs. News America Is Eating Its Profit