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Aon gets temporary win over Alliant in poaching lawsuit

Temporary bar prevents Alliant from soliciting clients


NEW YORK—Aon Corp. has won at least a temporary victory in a lawsuit that alleges poaching of employees and customers by Alliant Insurance Services Inc.

In a ruling late last month, New York State Supreme Court Judge Bernard J. Fried temporarily barred Alliant and some former Aon employees who joined Alliant's construction services group from soliciting business from certain Aon clients—those whose accounts on which the former Aon employees worked or served as producers.

Judge Fried also barred Alliant and the former Aon employees from soliciting any Aon construction group employees to work for Alliant.

Aon praised the judge's ruling in Aon Risk Services, Northeast and Aon Corp. vs. Michael Cusack and Alliant Insurance Services Inc., while an attorney for Alliant said he did not see the ruling as a “major setback.”

According to Judge Fried's ruling, the case “involves a systemic and coordinated raid by defendant Michael Cusack and his new employer, Alliant” on the clients and employees of Aon's construction services group.

Aon alleged that Mr. Cusack, while still an Aon managing director, and other former Aon executives met with Alliant to explore employment opportunities. Mr. Cusack and about 40 other construction group employees resigned June 13 and joined Alliant.

In his ruling, Judge Fried said that, in total, 60 Aon employees left to join Alliant and that “Aon has received more than 100 broker-of-record letters from clients transferring more than $20 million in revenue from Aon to Alliant.”

Aon alleged that Mr. Cusack and others committed breach of contract and violated their fiduciary duties. Aon also alleged that Alliant aided and abetted breach of fiduciary duty, interfered with its employment contracts and engaged in conspiracy.

Judge Fried said Aon was “likely to succeed on the merits” of those claims. However, he also said Aon failed to establish that either Mr. Cusack or Alliant had misappropriated any of Aon's confidential information.

He ordered Mr. Cusack and Alliant, as well as any former members of Aon's construction services group who were employed by Aon Northeast, who resigned on June 13, 2011, and who were subject to restrictive covenants, from soliciting business on behalf of Alliant from any Aon client for whom the former Aon employee was the producer “or on whose account he or she worked during the 24 months prior to June 2011.”

He also barred them from soliciting Aon construction group employees to work for Alliant until the case is decided.

“We are delighted with the court's decision and we are looking forward to the final trial on the merits,” an Aon spokesman said.

An attorney who represents Mr. Cusack and Alliant said the judge “narrowed the requested injunction by Aon substantially such that in his view there will be free competition between Aon and Alliant.”

“Aon did not have any confidential information that had been utilized by any of the Alliant people, and therefore there was really no damage to Aon but for the fact that Aon refused to properly renew employment contracts with some of its major producers,” said Blair Fensterstock, a partner in Fensterstock & Partners L.L.P. in New York.

“I do not see this ruling as a major setback to Alliant and/or to Michael Cusack,” he said, adding “that's not to say that I don't disagree with some of Judge Fried's findings.”

The ruling was the latest in a legal battle between Aon and Alliant over Alliant's hiring of employees of Aon's construction services group last year. The group includes Peter Arkley, who resigned as chairman and CEO of the Aon unit to head Alliant's construction practice.

In a complaint filed in chancery court in Chicago last June, Aon holds that the former executives conspired with Newport Beach, Calif.-based Alliant to solicit at least 40 other employees of Aon's construction services group to quit Aon and join Alliant. The complaint also alleges that the defendants poached Aon clients when they moved to Alliant.

In June, the Chicago court granted Aon a temporary retraining order barring several former executives in its construction services unit and Alliant from soliciting Aon employees and clients for Alliant.