A former employee at Initiative, a media-buying agency owned by Interpublic Group of CoIPG -1.05% s., filed a lawsuit claiming she was sexually assaulted by an employee from Dr Pepper Snapple Group Inc., DPS -0.03% an important client, and that her superiors reacted by trying to move her off the account.

The suit focuses attention on how sexual-harassment issues on Madison Avenue can extend beyond what happens inside ad firms. Staffers can be vulnerable in their dealings with clients, a power dynamic familiar in other industries where handling and entertaining business partners is a core part of the job.

In the suit, filed Tuesday in the U.S. District Court for the Southern District of New York, Nancy Mucciarone, a former associate director at Initiative, claims Justin Whitehead, a media manager at Dr Pepper, repeatedly propositioned her sexually, and after she turned down his advances, she alleges, he forcibly kissed and groped her.

Defendants in the suit include Initiative, Dr Pepper and Mr. Whitehead. Ms. Mucciarone is seeking unspecified damages, including for lost wages and benefits, medical expenses and emotional distress.

Ms. Mucciarone claims her work environment became hostile after senior executives at Initiative discovered she was preparing to take legal action. She claims she was advised by a manager to shift to a different client account at the agency.

A Dr Pepper spokesman said after the company was notified one of its employees acted in a manner contrary to its values, the company “took immediate action, and that employee was terminated.” Mr. Whitehead couldn’t be reached for comment.

Amy Armstrong, the U.S. chief executive of Initiative, said in a statement that the firm stands by its actions and is committed to a safe workplace. “When our employee reported inappropriate behavior by an employee of a client to our HR department, we immediately took action by providing all information to our client who swiftly terminated this person,” she said.

Ms. Armstrong said the company offered Ms. Mucciarone the chance to stay on the account or move to a comparable assignment but “she declined all offers and quit.”

The advertising industry has long been burdened with a reputation for abusive behavior toward women, a theme hammered home in the fictional TV series “Mad Men.” Agency staffers often are required to put in long hours with clients on location for ad shoots or to entertain them at lunches and after-hours events.

Cindy Gallop, a former advertising executive and entrepreneur who has been publicly calling on people in the ad industry to share their stories of sexual harassment, said she has received emails from both men and women recounting instances of sexual harassment from clients.

Agencies could help protect employees better, Ms. Gallop said, by creating work environments that are gender-equal or have more women than men, and by creating standards of sexual conduct that cover their own companies as well as their dealings with clients.

The suit brings a second controversy to an IPG-owned agency in recent months. Last month, a top executive, Joe Alexander, left the creative shop Martin Agencyover alleged sexual misconduct, and some company employees were upset at the company’s lack of transparency over the matter. Mr. Alexander denied wrongdoing. IPG defended its handling of the situation and said at the time it takes every accusation of harassment seriously.

IPG also is named as a defendant in Ms. Mucciarone’s suit. A spokesman said the company has been clear that when actions occur that run counter to its values, it takes swift action.“We’re pleased to see the leadership team at Initiative did exactly that in response to this very unfortunate incident,” the spokesman said.

Initiative is a global agency responsible for planning and buying advertisers’ media, with some 3,200 staffers across 90 offices. Dr Pepper is one of the largest accounts at the firm’s New York City office. Other clients of the agency include Amazon.com Inc., Merck and Lego.

The lawsuit claims that at a happy-hour event in New York in August, Mr. Whitehead “repeatedly made sexual overtures” to Ms. Mucciarone, which she rejected, and later pulled her shirt open, groped her breast and grabbed her buttocks.

Ms. Mucciarone quickly told Initiative managers at the bar about the assault, according to the suit. “They minimized it and advised her not to go to HR right away,” given how important the Dr Pepper account was to the agency, the suit says.

Ms. Mucciarone went against their advice and informed Initiative’s human-resources department anyway, according to the suit.

Initiative said in a statement Ms. Mucciarone’s direct manager received a formal written warning about his delay in reporting the incident to management, which directed him to attend a mandatory “Respect in the Workplace” training session. Initiative said that manager was terminated for unrelated issues on October 13.

The suit claims senior Initiative executives retaliated against Ms. Mucciarone by ratcheting up criticism of her and advising her to move to another team within the agency or another IPG company.

Ms. Mucciarone, who according to the suit had only ever worked on the Dr Pepper team during her time at Initiative, left the company shortly thereafter, feeling the agency had put her in an “intolerable situation,” the suit said.

In a statement, Initiative said it offered to move Ms. Mucciarone away from the Dr Pepper account in the belief that she wanted a new assignment. She expressed discomfort about working alongside Mr. Whitehead’s colleagues, who were present at the incident, and was having problems with a new manager, the statement said.

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