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Rival pays Brown & Brown $20 million to settle noncompete case

Posted On: Mar. 2, 2017 3:12 PM CST

Rival pays Brown & Brown $20 million to settle noncompete case

Brown & Brown Inc. will receive $20 million in a settlement of litigation over a rival’s hiring several of its employees, the broker said Thursday.

Daytona Beach, Florida-based Brown & Brown had charged that eight of its employees were hired by Lake Mary, Florida-based broker AssuredPartners Inc. in violation of their employment agreements. They had left Brown & Brown and joined AssuredPartners in May.

Robert Lloyd, Brown & Brown’s executive vice president, secretary and general counsel said that under terms of the agreement, in addition to paying the $20 million, AssuredPartners is restricted from hiring anyone in its Daytona Beach and Orlando, Florida, offices for 18 months, and nationally for six months.

The settlement was approved by Judge Christopher France, of the 7th Judicial District in Volusia County, Florida, in Daytona Beach on Wednesday.

Mr. Lloyd said, “We think it’s the right result. It’s unfortunate we had to go down this path, but we believe we’ve wholly and fully resolved this situation for Brown & Brown.”

An AssuredPartners spokesman said, “We’re pleased to get the litigation behind us.” He said, “It gives us a great opportunity to grow this important sector in our business and our company, and likewise provide a fair and economical settlement with Brown.”

 The spokesman said a total of 15 employees were involved, including seven who had not been named in the litigation. “The financial settlement was for the privilege of their releasing their two-year agreement on competing with Brown & Brown,” he said.

The settlement was announced the day before a hearing that was to be held Thursday as to whether AssuredPartners and the employees should be held in contempt for violating the court’s temporary injunction, which was issued on Oct. 24, 2016.

The temporary injunction prohibited the defendants from “further breaching” restrictive covenants that say the former employees cannot work for another company in the insurance business for two years after termination of their Brown & Brown employment, nor disclose confidential information. 

 In issuing the temporary injunction, the court said Brown & Brown “had demonstrated a substantial likelihood of succession the litigation.”

In seeking the hearing, Brown & Brown had filed a motion on Dec. 20, which charged that in the previous week it had discovered through emails that were inadvertently sent to the defendants’ old Brown & Brown email accounts that they were continuing to service its customers and failing to inform the clients of the injunction.

The motion says the defendants solicited Brown & Brown customers “when they have repeatedly represented to this court that there is no evidence of solicitation, which their recent productions show to be false.”