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The Alabama Supreme Court partially affirmed a ruling in favor of EPIC Holdings Inc. and an employee in litigation filed by an Alabama insurance broker that charged them with breach of contract and interference with a prospective employment relationship.
The focus in Friday’s ruling in Cobbs, Allen & Hall Inc. v. EPIC Holdings Inc. was whether comments a former Cobbs Allen employee, now working for Concord, California-based EPIC, made to a prospective Cobbs, Allen employee, violated an earlier settlement.
Crawford E. McInnis, an employee of Cobbs, Allen, a unit of CAH Holdings Inc., was fired “for cause” and in November 2014 went to work for EPIC, becoming a local branch manager at its Birmingham office.
In December 2014, CAH filed suit against EPIC, Mr. McInnis and other defendants alleging that Mr. McInnis and other former employees had breached restrictive covenants in their employment agreements and that EPIC had aided and abetted those breaches, the rulings. A confidential agreement in the litigation was reached on the eve of trial.
In June 2018, CAH began negotiating with Michael Mercer, a Lockton Cos. LLC account executive, about working for it. On the recommendation of another Lockton producer, Mr. Mercer sought advice from Mr. McInnis about working for CAH.
Mr. McInnis told Mr. Mercer that CAH was a “terrible place to work” and other negative comments. Mr. Mercer decided to stay at Lockton and not take the CAH job offer.
CAH filed suit against EPIC and McInnis over whether the settlement agreement had been breached in Mr. McInnis making the disparaging comments about CAH, with EPIC accused of being directly or vicariously liable for Mr. McInnis’ conduct.
In January 2020, a lower Alabama court entered summary judgment in EPIC and Mr. McInnis’ favor on all claims, and CAH appealed.
“Based upon the admissible evidence, an issue of fact exists as to whether McInnis gave Mercer honest advice,” said the 6-1 majority opinion, in reversing the lower court’s ruling on the issue of whether he had interfered with CAH’s prospective employment relationship with Mr. Mercer.
The majority opinion otherwise affirmed the lower court’s ruling, agreeing with the lower court that CAH’s breach-of-contract claim against Mr. McInnis and EPIC failed because there was “no duty not to disparage parties” in the settlement agreement.
The minority opinion said he would have affirmed the lower court’s ruling in its entirety.
Cobbs Allen CEO Grantland Rice III said the company does not comment on pending litigation. EPIC did not respond to a request for comment.