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An arbitrator has issued a final award of $5.8 million to USI Insurance Services LLC in a dispute with ABD Insurance and Financial Services Inc. in a trade secrets appropriations case involving a former Wells Fargo Insurance Services USA Inc. benefits executive’s noncompete agreement.
Keith VanderZanden, a benefits executive who left Wells
Fargo Insurance Services USA Inc. in October 2017, and San Mateo, California-based ABD were found liable for breach of contract, intentional interference with contract, breach of duty of loyalty, liability under the Washington Uniform Trade Secrets Act and for attorneys fees by an arbitrator who issued an interim $5.8 million award in September. USI finalized its acquisition of Wells Fargo in December 2017.
A final award in the case, USI Insurance Services National Inc. et al. v. Keith VanderZanden and ABD Insurance and Financial Services Inc., et. al. was issued by the arbitrator Monday.
“As his employer, (Mr. VanderZanden) owed (USI) a common-law duty to not undermine his employer’s business or disclosed its confidential information,” said the interim award.
Mr. VanderZanden, who in 1999 had signed a noncompete agreement with Acordia NW Inc., which was subsequently acquired by Wells Fargo, “violated his duty of loyalty to his employer (by) leaking its confidential information and proprietary business processes to its competitor ABD to enable it to replicate the (Wells Fargo) business systems and replace (Wells Fargo) as the Managing General Agent for the seven employer trusts previously under contract” to Wells Fargo.
The final $5.8 million award reflects $4.8 million in damages, plus $761,606 for attorneys fees and $117,669 in costs.
“USI is pleased that the Arbitrator found it is in our favor on all of the claims in the arbitration, especially in light of ABD’s bad faith conduct throughout the litigation,” said the broker in a statement.
“As the arbitrator explained in his original decision, ABD conspired ‘extensively’ with Keith VanderZanden while VanderZanden still worked at USI’s predecessor, Wells Fargo Insurance. They ‘recreated history’ by falsely telling clients that the thousands of proprietary analytical tools they stole from Wells Fargo were created by ABD.
“This kind of behavior is absolutely antithetical to ethical business practices, and we’re glad the arbitrator recognized this and enforced the law against VanderZanden and ABD.”
Attorneys for ABD and Mr. VanderZanden could not be reached for comment.
A lawsuit filed by Marsh LLC against NFP Corp. over alleged employee poaching was stayed by a federal judge last week after the rival brokerages reached an agreement in principle to settle the dispute.
Tim Prichard, who was appointed head of Wells Fargo & Co.’s insurance brokerage in April, will join USI Insurance Services L.L.C. as a president of the firm as part of USI’s deal to purchase the bank-owned brokerage.