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Eight former Wells Fargo Insurance Services USA Inc. employees in Pittsburgh filed a motion in federal court Thursday to dismiss a case brought by their former employer charging them with breaching an agreement not to solicit Wells Fargo clients.
The defendants filed a motion in the U.S. District Court for the Western District of Pennsylvania challenging the validity of the agreements on grounds that Wells Fargo is selling its commercial insurance business to USI Insurance Services L.L.C.
The action was in response to a complaint that Wells Fargo filed alleging the defendants had conspired with San Francisco-based EPIC Insurance Brokers & Consultants to raid Wells Fargo and open a new office in Pittsburgh.
Wells Fargo charged that the defendants and EPIC hired roughly 25% of its Pittsburgh employees who served over $4 million in client revenue. Wells Fargo said it received notice from clients who have sent in their “Broker of Record” letters, indicating that they are taking their business away from Wells Fargo and moving it to EPIC.
The defendants conspired to arrange to depart en masse, the Wells Fargo complaint said, and submitted their resignations between Sept. 27 and Oct. 3.
“EPIC and the individual defendants established an EPIC Pittsburgh office — the office did not previously exist,” the complaint said, “with the clear intention of soliciting (Wells Fargo’s) customers, using Wells Fargo’s confidential customer information and working to undermine (Wells Fargo).”
Each former employee had signed a version of an agreement designed to protect the relationships he or she developed for Wells Fargo and protect Wells Fargo’s financial interests and business.
In addition, Wells Fargo alleged that the defendants are spreading false information regarding the company’s Pittsburgh office, telling customers that certain employees had left when they knew this wasn’t true.
“This dissemination of information has been done for the sole purpose of undermining (Wells Fargo’s) business,” the complaint said.
Among other things, Wells Fargo is seeking to stop the defendants for soliciting any remaining Wells Fargo employees from leaving the company for two years and to keep them from violating the terms of their respective employment agreements for the same period of time.
The company is also seeking monetary and punitive damages.
The defendants in their response said Wells Fargo had agreed to sell its entire commercial insurance business to USI Insurance Services. Following the agreement to sell, the defendants’ motion said Wells Fargo “no longer possesses the substantive right to enforce the terms of the individual defendants’ restrictive covenants.”
“It is apparent that (Wells Fargo) is not the real party in interest as respects the claims asserted,” the defendants’ motion said.
The defendants said that prior to their resignations, USI had demanded that they execute new employment agreements with USI and imposed a non-negotiable deadline of Oct. 6.
Wells Fargo declined to comment on the litigation. USI has not returned a call seeking comment.
“We believe the court will quickly find Wells Fargo’s lawsuit to be completely without merit, as it is materially flawed both factually and legally,” Dave Hock, EPIC’s senior vice president of marketing and communications, said in an email. “Our position is fully outlined in our Motion to Dismiss, as well as our response to Wells Fargo’s request for Temporary Injunctive Relief, which are a matter of public record.”
Aon P.L.C. sued rival Willis Towers Watson P.L.C. on Monday alleging that the brokerage’s incoming chief financial officer, Michael Burwell, has knowledge of Aon’s trade secrets from when he work with Aon as a consultant at PricewaterhouseCoopers L.L.P. and breached his fiduciary duty to Aon by taking on his new post.