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Injunction barring Alliant solicitation of Aon clients upheld on appeal

Posted On: Jan. 11, 2013 12:00 AM CST

Injunction barring Alliant solicitation of Aon clients upheld on appeal

A New York appellate court on Thursday ruled in favor of Aon P.L.C. in its ongoing employee poaching dispute with Alliant Insurance Services Inc.

The ruling upheld an injunction issued by New York Supreme Court Justice Marcy S. Friedman in September that forbids Alliant Senior Managing Director Peter Arkley, formerly CEO of the construction operations at London-based Aon, from soliciting business from any former Aon client or customer that he worked with during the two years prior to June 13, 2011.

In June 2011, Mr. Arkley and other former Aon employees filed a lawsuit in California challenging the legality of the noncompete clauses in their employment contracts with Aon. Aon subsequently sued Mr. Arkley in New York, alleging that he and several former Aon executives conspired with Alliant to solicit at least 40 other employees to quit Aon and join Newport Beach, Calif.-based Alliant.

In the complaint, Aon alleged that the suit filed in California was a “tactical first strike” intended to shift the legal battle to California, where employment noncompete clauses have a lesser legal standing.

“The timing of the commencement of the California action, the declaratory relief sought therein, and the evident disfavor California law holds for restrictive covenants, support the motion court's finding that the California action was a pre-emptive measure undertaken to gain a tactical advantage so as to negate the force and effect of the restrictive covenants, which the parties had freely agreed upon,” the appellate court ruling states.

An Aon spokesman said the company was “very pleased” with the appellate court ruling.

“The decision was on interim rulings in the New York case, and it did not address the ultimate merits,” an Alliant spokesman said in an email. “The decision has no impact on Alliant's business or ability to serve all of its existing clients. We are confident in our case and look forward to bringing the case to trial where the ultimate merits of the allegations will be addressed.”