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A California jury found that a group of 10 former Aon P.L.C. brokers did not breach their fiduciary duty to the broker when they left Aon to join rival Alliant Insurance Services Inc. in 2014 and were later followed by a team of more than 60 other Aon employees.
The case is one of several between Aon and Alliant where Aon accuses the Newport Beach, California-based brokerage of orchestrating mass raids on Aon staff, causing the departing brokers to breach noncompete agreements they had signed with Aon.
After a two-month trial, the jury in Peter Baldwin et al v. Aon Risk Services Inc. last week cleared the former Aon brokers of breach of fiduciary duty, aiding and abetting fiduciary duty, breach of duty of loyalty, interference with contract and theft of trade secrets.
The case began after a group of staff in Aon’s California operations in Fresno, Salinas and Walnut Creek left the brokerage for Alliant in February 2014.
The group was led by John Day, a former resident managing director and a senior construction broker in the region, court documents say.
According to an Aon cross-complaint in the case, the Alliant recruitment of its staff “decimated the Fresno and Salinas offices, leaving only a handful of employees to service nearly 9,000 Aon clients.” As part of the recruitment of Aon employees, Alliant tried to take on “thousands of Aon’s customers that collectively generate approximately $30 million in business each year,” the complaint states.
The brokerage alleges, that the “raid” was orchestrated to coincide with an Aon national leadership conference in Charleston, South Carolina, so that Alliant could “bring in as many of Aon’s shocked and unsettled employees as possible” before Aon could react.
The core group of 10 former Aon brokers filed suit in March 2014 seeking declaratory relief from noncompete agreements they had signed with Aon. Aon filed a cross-complaint seeking to uphold the agreements and moved the case to New York, where it won a temporary injunction. Alliant succeeded in moving the case back to California, where state law makes it difficult to successfully enforce noncompete agreements outside of a sale of a business, and the case went to trial in Fresno County Superior Court in late January of this year.
Aon alleged that the 2014 recruitment by Alliant was a continuation of a raid of Aon employees that began in 2011 with the recruitment of Peter Arkley, former head of Aon’s construction services group, and 55 other staff members in Los Angeles. According to court documents, that defection cost Aon $20 million in client revenues. That case was settled in 2013.
Another case involving the two brokers, Aon P.L.C. v Michael Heffernan, is being heard in Illinois. Last month, Aon won a court ruling rejecting Alliant’s attempt to move the case to California.
A federal judge in Chicago has issued a temporary restraining order forbidding Alliant Insurance Services Inc. from soliciting Aon construction services group employees and clients.