Marsh & McLennan Agency, LLC v. Alliant Insurance Services, Inc.

Background

Marsh & McLennan Agency, LLC (MMA), an insurance brokerage and risk-management firm, sought a preliminary injunction against its competitor, Alliant Insurance Services, Inc., and former employees Johnny Osborne, Margaux Stone, and Rachel Murray. Osborne had worked as a Senior Vice President responsible for client relationships. Stone and Murray were members of his team. MMA alleged that Osborne took or used confidential client information, solicited clients to move their business to Alliant, recruited employees, and violated a Non-Solicitation and Confidentiality Agreement. MMA also asserted claims involving breach of contract, trade-secret misappropriation, breach of fiduciary duty, tortious interference, and conspiracy.

The agreements barred the former employees, for two years after leaving MMA, from soliciting certain MMA clients or prospective clients, inducing them to end or not renew business with MMA, or servicing clients with whom they had contact during the last two years of employment. The agreements also restricted efforts to cause MMA employees to leave and prohibited use or disclosure of defined confidential information and trade secrets.

Evidence and Arguments

MMA submitted evidence that Osborne created or printed spreadsheets containing client names, contact information, policy information, policy numbers, expiration or renewal dates, and premiums. It also presented evidence that Osborne contacted at least one client after his departure, that Stone and Murray knew before Osborne resigned that he planned to join Alliant and might be joining him, and that at least 29 clients had submitted broker-of-record letters transferring business away from MMA by December 20, 2024. MMA stated that it had lost 38 clients from Osborne’s book of business to Alliant by the hearing.

The defendants jointly opposed the application with a memorandum of law but no supporting evidence, and Alliant declined to offer evidence at the hearing. Alliant argued that the agreements were unenforceable or overbroad under New York law. The court explained that New York generally enforces restrictive covenants only when they protect a legitimate employer interest, do not impose undue hardship on the employee, and do not injure the public. The court concluded that the client non-solicitation provision was reasonably limited to clients or prospective clients with whom the employee had contact during the last two years and lasted only two years after separation. The court did not decide whether the agreement’s entire definition of confidential information was overbroad, but found that the particular client information at issue was protectable and separable from any potentially overbroad language.

Preliminary-Injunction Analysis

A preliminary injunction is temporary relief issued while a case is pending. MMA had to show irreparable harm, a likelihood of success on the merits or sufficiently serious legal questions combined with a strongly favorable balance of hardships, and that an injunction would serve the public interest.

The court found irreparable harm because further loss of client relationships and goodwill would be difficult or impossible to measure financially. It found that MMA was likely to succeed on claims that Osborne breached the agreement by misusing confidential information, soliciting clients, and soliciting employees. The court also found that MMA met the preliminary-injunction standard for some claims against Alliant, including tortious interference with the agreement, and for MMA’s claims that Stone and Murray breached the non-servicing provision. The court stated that the evidence raised serious questions about whether Stone and Murray left as a team to continue servicing the same clients.

The court also found that the public interest favored preventing further use or disclosure of MMA’s confidential information, further loss of clients and goodwill, and further solicitation or servicing prohibited by the agreements. However, the court declined to issue an order directly against nonparties merely because they might be acting in concert with Alliant. It instead barred the defendants themselves from supervising, assisting, or acting in concert with others to evade the injunction.

Disposition

The court granted in part and denied in part MMA’s application for a preliminary injunction. Pending resolution of the case, the defendants were enjoined from: (1) soliciting, accepting, or servicing MMA clients or prospective clients with whom the individual defendants had contact, or about whom they obtained information, because of their MMA employment during the last two years; (2) endeavoring to cause MMA employees to leave MMA; (3) using or disclosing information in the “Osborne Client list,” the “JVO Master Renewal List,” or similar confidential information obtained from MMA; and (4) supervising, assisting, or acting in concert with others to evade those restrictions. The court also ordered MMA to post a bond stated in the opinion as $300,0000 under Federal Rule of Civil Procedure 65(c).