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Lockton Cos. LLC has fired a barrage of litigation against Alliant Insurance Services Inc. for allegedly poaching 26 of its employees, including lawsuits filed in Delaware chancery court and state and federal courts in Missouri.
The litigation charges that beginning on March 12, Newport Beach, California-based Alliant “poached” from a Denver-based Lockton unit seven producer members, 19 other employees and 24 customers “representing millions of dollars in revenue,” according to the lawsuit filed in Delaware Chancery Court in Delaware Friday in Mountain West Series of Lockton Cos. LLC and Lockton Partners LLC v. Alliant Insurance Services.
Kansas City, Missouri-based Lockton also filed litigation against individual former employees Monday in U.S. District Court in Kansas City, Missouri, Mountain West Series of Lockton Cos. et al. v. Michael Angelo Dauro et al. Mr. Dauro is one of the employees who left Lockton.
Litigation was also filed Thursday against former employees in state circuit court in Kansas City, in Mountain West Series of Lockton et al. v. Charles M. McDaniel et al. Mr. McDaniel is one of the owners and members of Mountain West Series who left.
“We have filed suit in multiple jurisdictions in response to the illegal raid on our clients and our people,” a Lockton spokeswoman said in a statement. “We are seeking expedited relief to halt their illegal activity against Lockton.”
An Alliant spokesman could not immediately be reached for comment.
Lockton is the ninth-largest broker of U.S. business, according to Business Insurance’s latest ranking, while Alliant is the 10th-largest.
The litigation, which charges that the departed employees violated nonsolicitation agreements, focuses on Lockton’s Mountain West Series, which is headquartered in Denver and as of mid-2018 served more than 2,000 customers from Denver, Phoenix, Las Vegas and Seattle, according to the Delaware litigation.
It states, “Lockton has been and continues to be the target of a long- planned and ongoing corporate raid orchestrated by Alliant, a direct competitor in the insurance brokerage market, designed to strip Lockton of its key Producer member owners and employees, unlawfully divert Lockton’s key customer relationships, and misappropriate Lockton’s confidential customer and strategic information, reputation, and goodwill in order to illegally expand Alliant’s market share and revenue.”
The lawsuit charges that “certain highly placed and trusted” owners of the Series became “secret double agents, who over the course of several months, conspired with Alliant” to recruit others, and that this was “spearheaded” by Peter Arkley, president of Alliant’s specialty group.
On March 12, according to the lawsuit, seven commercial insurance brokers who are owners and members of the Mountain West Series and, in some instances, Lockton partners, abruptly notified Lockton they were resigning effectively immediately, allegedly in violation of their contractual obligations to provide 30 days’ notice.
The lawsuit said 13 additional employees resigned the same day followed within days by six more.
The lawsuit said that “within hours” of the first resignations, other employees began notifying Lockton they were being “aggressively solicited by Alliant to jump ship,” while at the same time “numerous” customers began submitting requests to move their business to Alliant with several others notifying the Series that Alliant was aggressively soliciting their business as well.
The litigation states Alliant and the raided owners and employees then misappropriated Lockton’s trade secrets and other confidential information to solicit the Series’ customers “to move their business to Alliant (much of which solicitation was likely done prior to the individuals announcing their resignation from Series.)”
“The speed and scale of the departures of owners and employees, and their immediate and efficient solicitation of customers from the Series, demonstrate clearly that Alliant planned this raid well in advance” says the lawsuit, which charges tortious interference with contract, “prospective economic advantage/Prospective Business Relationships,” and misappropriation of trade secrets, among other charges.
The Delaware litigation seeks preliminary and permanent injunctive relief and damages. The state and federal litigation against the individual defendants charge breach of contract and of fiduciary duties and unjust enrichment, and seek injunctive relief.
USI Insurance Services L.L.C. has filed suit against a former Wells Fargo Insurance Services USA Inc. broker and Lockton Cos. L.L.C., charging the broker joined Lockton in violation of his noncompete agreement.