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The Delaware Chancery Court has issued a preliminary injunction against Alliant Insurance Services Inc. in connection with the alleged poaching of more than two dozen Lockton Cos. LLC staff.
The court said in Thursday’s ruling that Lockton “has shown a reasonable probability of success on the merits (of its tortious interference claim), a threat of irreparable harm and a balancing of the equities that favors the issuance of an injunction.”
Lockton had sought a preliminary injunction that bars Alliant from soliciting Lockton’s customers, servicing the Lockton customers “that Alliant had captured to date,” soliciting Lockton’s employees and using Lockton’s confidential information.
Kansas City, Missouri-based Lockton has filed litigation in multiple courts. It charged that beginning March 12, Newport Beach, California-based Alliant illegally “poached” from a Denver-based Lockton unit seven producers, 19 other employees and 24 customers “representing millions of dollars of revenue,” according to the lawsuit filed March 22 in the Delaware court in Mountain West Series of Lockton Cos. LLC had Lockton Parties LLC v. Alliant Insurance Services.
The ruling states, “The Former Employees’ solicitation efforts have had a massive effect on Lockton. By the date of the preliminary injunction hearing, Alliant had solicited at least 144 Lockton customers.
“Fifty customers had moved their business to Alliant. Two other customers had announced that instead of renewing their business with Lockton, they would issue requests for proposal that would permit any firm to bid.”
“Alliant encouraged and facilitated the efforts of its new hires to solicit their Lockton customers,” said the ruling. “Indeed, having the Former Employees solicit their Lockton customers was the reason that Alliant engineered their mass resignations.
“Beginning in September 2018, Alliant spent months recruiting and then working closely with the Producer Members to plan and coordinate their departures. “
It said although Alliant knew of the producer members’ restrictive covenant agreements “rather than respecting those covenants, Alliant induced the Producer Members to leave Lockton and breach them,” and expanded its recruiting effort to the insurance professionals who supported the producer members.
“In some cases, there is evidence that the Producer Members assisted Alliant before leaving their employment with Lockton by soliciting Lockton customers and their fellow Lockton employees.”
The ruling says also Lockton has sued the producer members in state court in Missouri, but because of pending criminal cases there “only this court is in a position to address in a timely fashion the interim relief that Lockton has requested.”
A Lockton spokeswoman had no comment. Alliant said in a statement it “is reviewing the court’s memorandum opinion and considering its legal options. This concerns a preliminary injunction and is not a final decision on the merits. The opinion recognizes Alliant has procedures to prevent the former employees from bringing electronic information with them from Lockton including blocking the former employees for a period of time from accessing external devices, personal email, or cloud storage and file sharing websites. Alliant also had the former employees sign 'Prospective Employee Departure Protocols,' in which they agreed not to take, disclose, use, or otherwise misappropriate any Lockton trade secrets or confidential information.”
Litigation filed in multiple courts by Lockton Cos. LLC alleging rival brokerage Alliant Insurance Services Inc. poached more than two dozen staff reflects a market where talent is scarce, say observers.