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Static on the Dial

Shady ethics and racism behind the scenes at Clear Channel radio? That's what ex-employee June Garcia Sherman is claiming in a lawsuit

A little less than four months after getting fired by Clear Channel Broadcasting, June Garcia Sherman, formerly the director of nontraditional revenue at five local Clear Channel stations, decided she wasn't going to take her dismissal lying down. On May 5, she filed suit against Clear Channel Worldwide, Clear Channel CEO Lowry Mays and Rick Martiny, her boss in Houston, and her litigation has Houston's radio industry in a tizzy.

As first reported in the Virginia-based trade mag Radio Business Report,Sherman is claiming that she was fired because she questioned the ethics of a Halloween haunted house deal put together by Steve Kopelman, the brother of Clear Channel Houston's regional vice president/market manager Mark Kopelman. The suit also alleges that the Galleria-area offices of Clear Channel Houston were a discriminatory environment for women and minorities, and indeed, the 137-point suit reads like some kind of R-rated, politically incorrect series of Dilbertcartoons.

A Clear Channel spokeswoman declined comment, citing a company policy that disallows discussion of pending litigation. The company has issued a general denial in the suit and is seeking to have it thrown out of court and into arbitration, based on guidelines in its employee handbook.

The arbitration clause in that handbook is broad, to say the least. Basically, if you're an employee and you have any beef with Clear Channel -- be it one about discrimination, sexual harassment or even whether your case is covered by the company arbitration agreement -- an arbiter gets to hear the case, not the courts. If you signed for your employee handbook and continued to work at Clear Channel, that means you agreed to the arbitration, Clear Channel's lawyers claim.

A written record of Sherman signing for the handbook is on file, but her lawyers are seeking to nullify the arbitration agreement because the handbook was for a company called Clear Channel Worldwide, which they claim is not a legal entity. Clear Channel says it's not a company per se but a recognized service mark, and therefore Sherman is subject to the agreement.

In Racket's opinion, it would indeed be a pity if this suit got thrown out of court -- if for no other reason than a jury would get cheated out of hearing a corker of a tale. Read on.

The suit states that in April of last year, Martiny told Sherman that she would be handling a haunted house deal in October. She was told that Steve Kopelman, who is not employed by Clear Channel, would be getting half the proceeds from the gate, and that Clear Channel Broadcasting would be paying all hard costs (budgeted at more than $300,000) and would also provide free advertising on its radio stations, she says in the suit.

With the fall of Enron still fresh on everybody's mind, Sherman says, she was concerned by what she saw as a shady project. The suit states that she expressed her concerns to Martiny, who then told her not to make "a stink" about the deal, before acknowledging that there might be something not aboveboard about it. According to the suit, Martiny said "there was probably some kind of deal going on but we have to do it because Kopelman is the market manager." Sherman responded that she thought that using company money for personal profit "didn't smell right." Martiny repeated his warning to her, the suit says.

From that day forward, the suit claims, Sherman's days on the job were numbered.

In June of last year, Sherman was told that her department wouldn't be getting the raises they had thought were forthcoming. The next month, Sherman and Steve Kopelman settled on the closed-down Old Navy store at Northwest Mall as the haunted house's home. Clear Channel swung the deal by giving Northwest Mall $30,000 in free advertising, the suit says.

Sherman expressed more concerns to Martiny, the suit says. Martiny told her to comply. Sherman agreed, but said that it "didn't look good that the company wouldn't pay the salary increases which it had promised to [her] department staff, and that it was footing the bill for Steve," the suit says.

Papa John's pizza was brought aboard as the title sponsor for the event. It paid Clear Channel $54,000 for a series of spots on the Mix. According to the suit, the pizza chain wanted more than the typical name mention and four-word tag such as "Papa John's -- the best pizza in town" or something like that. Sherman claims that she wouldn't budge -- Papa John's would have to be content with the same deal all the other nontraditional sponsors got.

Eventually, Sherman stepped aside and Cindy Abreu, an account executive at Clear Channel's classic rock station the Arrow and a member of that station's board of directors, took over negotiations with Papa John's. According to the suit, Papa John's fretted that some of the spots it had bought might not run, so Abreu forced all local station managers to give the chain ad time, and allowed Papa John's to add ten- to 15-second commercials to the haunted house promos. According to the suit, this shift renders the commercials salable inventory, and therefore shareholders' money.

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