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USI files poaching suit against former employee

Posted On: Mar. 16, 2023 2:38 PM CST


USI Insurance Services LLC is suing a former employee, charging him with soliciting its clients and employees to move to a competitor that he controlled while still working for the broker.

Kenneth Dixon Wright was a partner in an insurance brokerage business that USI’s predecessor, Wells Fargo Insurance Services USA Inc., purchased for more than $1 million, according to the lawsuit filed in U.S. District Court in San Francisco on March 9. The case is USI Insurance Services LLC vs. Kenneth Dixon Wright; Surety Resource Connection Inc., dba Digital Insurance Services.

Under a purchase agreement into which Mr. Wright and Wells Fargo/USI entered, Mr. Wright received the sale proceeds and, in consideration for that, promised not to compete with USI, including not soliciting its clients or employees during his employment with USI and for two years after it ended.

The lawsuit states that around January, USI learned that Mr. Wright, who still worked at the brokerage, was violating his promises by trying to get USI clients and employees to shift to Petaluma, California-based SRC.

“Despite USI’s multiple warnings that he was in violation of his contractual obligations, Wright refused to stop engaging in such efforts to compete with USI and admitted that he was actively working to transfer USI’s clients, revenue and employees to SRC,” the complaint states.

It said he resigned from USI on March 3 but has continued to solicit USI clients, in violation of his contractual obligations.

The complaint charges him with breaches of contract, duty of loyalty and fiduciary liability, and all defendants with intentional interference with prospective economic advantage,

USI had no comment, while SRC did not respond to a request for comment.

USI recently filed poaching lawsuits against Alliant Insurance Services Inc. in Arizona and California federal district courts.