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Brown & Brown noncompete agreements ruled enforceable

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Brown & Brown Inc. has obtained a temporary injunction against a rival broker that hired several of its former employees, with a state judge ruling that employment agreements prohibiting their move to a rival for two years after they left Brown & Brown were “valid and enforceable.”

Daytona Beach, Florida-based Brown & Brown had charged that eight of its employees had been hired by Lake Mary, Florida-based AssuredPartners Inc. in violation of their employment agreements, according to a temporary injunction filed Monday in Volusia County Circuit Court in Daytona Beach, Florida, in Brown & Brown Inc. v. AssuredPartners Inc. et al.

The employees left Brown & Brown and joined AssuredPartners in May, according to a spokesman for Brown & Brown’s law firm, Chicago-based Freeborn & Peters L.L.P.

“Brown & Brown has a legitimate business interest in the restrictive covenants contained within the employment agreements which includes protecting its relationships with its customer and protecting its confidential information, amongst other things,” said Judge Dennis Craig in his ruling.

These restrictive covenants state the employees, who signed employment agreement in years ranging from 1997 through 2015, cannot work for another company in the insurance business for two years after termination of their Brown & Brown employment, nor disclose confidential information, according to the ruling.

“Brown & Brown has demonstrated a substantial likelihood of success on the merits, irreparable harm and the unavailability of an adequate remedy at law” because the loss of its customers “cannot be monetized, the threatened injury to Brown & Brown outweighs any potential harm to the defendants upon whom this injunction will be issued, and the granting of this temporary injunction will not disserve the public interest,” says the ruling.

The temporary injunction prohibits the defendants from “further breaching the restrictive covenants” and calls for the defendants to divest themselves of former Brown & Brown customers, unless doing so would cause the customers harm.

Mark King, Brown & Brown’s chief litigation counsel, said the next step in the litigation would be a trial on the case’s merits and then possibly a permanent injunction and the award of damages.

Mr. King said these cases are difficult to initiate, but “Brown & Brown has always been very diligent in protecting its confidential information and its remaining teammates, as well as the interests of our customers.”

AssuredPartners said in a statement: “We disagree with the ruling and are reviewing it to determine our next course of action as AssuredPartners intends to vigorously defend its position.  There was no finding that the former Brown & Brown employees solicited any of their former customers.  AssuredPartners has and continues to stand ready to pay fair market value for those accounts that elected to follow their trusted agents who left Brown & Brown and joined AssuredPartners.  Payment for accounts that follow a broker is a customary practice in the industry.” 

The former Brown & Brown employees named in the litigation are Richard T. Schwartz II, Brian E. Lindahl, Phillip L. Masi, Negar Sharifi, Jennica A. Mandarano, Kathryn E. Bloodwell, Michael A. Randall and Danielle Mattson.