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Former HRH producer's nonsolicitation agreement enforceable: Court

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STAMFORD, Conn.—A nonsolicitation agreement signed by a former Hilb Rogal & Hobbs Co. producer who resigned to join a rival brokerage firm is enforceable, even if the agreement erroneously excluded language expressly prohibiting certain actions, the Connecticut Appeals Court has ruled.

The ruling reverses a 2008 trial court decision that found in favor of Uta Peters Randall, an 18-year veteran of Hobbs Group and then HRH, who left the brokerage in October 2005 to join Beecher Carlson. HRH acquired Hobbs Group in 2002.

HRH sued Ms. Randall a few months after she left, alleging she violated her employment agreement, which included a two-year nonsolicitation covenant, by soliciting HRH business.

According to court papers, Ms. Randall served retail office-supply company Staples Inc. while at HRH and developed a close professional relationship with Staples’ risk manager. Shortly after learning Ms. Randall had met with her former client in December 2005, HRH filed its suit. A year later, Ms. Randall responded to a request for proposal from Staples. HRH contended in court filings that, in December 2006, Staples moved its business to Beecher Carlson, resulting in annual lost fee income. The court documents do not imply that Staples or its risk manager did anything wrong.

In 2008, a trial court ruled that Ms. Randall did not breach her employment agreement because the employment contract was missing the promissory words necessary to make enforceable the nonsolicitation provisions.

A three-judge appeals court panel disagreed, ruling that although the agreement erroneously omitted prohibitory language such as “I shall not” or “I will not” before two subsections of the nonsolicitation provision, “the agreement is not ambiguous because it clearly expresses the parties’ intent to bar solicitation.”

The case was remanded for a new trial.

“This ruling is a non-event,” Adam Meyerowitz, Beecher Carlson’s general counsel, said in a statement. “As we have maintained and continue to maintain, Uta has done nothing wrong. This technical decision regarding the enforceability of her contract does not change that.”

Willis Group Holdings, which acquired HRH last year, declined to comment.

The court opinion can be viewed at http://www.jud.state.ct.us/external/supapp/Cases/AROap/AP115/115AP323.pdf