An insurance broker has agreed to pay $20 million to settle claims that it had poached a competitor’s employees.
AssuredPartners - which expanded into Canada with its acquisition of LJ Stein last year - will pay $20 million to Brown & Brown in one of the largest settlements of its kind. The payment, which AssuredPartners will transfer to Brown & Brown immediately, resolves the latter company’s “restrictive covenant” complaint against the former. The settlement was agreed upon just one day before senior Assured execs were due to appear before a Circuit Court judge in Florida to explain why they shouldn’t be held in contempt for repeatedly violating an injunction the court had entered against them.
AssuredPartners is led by CEO Jim Henderson and COO Tom Riley — both former Brown & Brown employees. Brown & Brown claimed in its lawsuit that Henderson and Riley hired eight top Brown & Brown employees and helped them break restrictive covenants that prohibited them from soliciting or servicing Brown & Brown clients for at least two years.
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In October, a Florida circuit court issued an injunction ordering AssuredPartners not to solicit or service former Brown & Brown clients and to divest themselves of the former Brown & Brown accounts they’d already procured. But Brown & Brown claimed that Assured continued to violate the restrictive covenants despite the injunction.
Besides agreeing to the $20 million penalty, AssuredPartners has agreed not to hire any more Brown & Brown employees for a period of time and to return any confidential business information it may have. In exchange, Brown & Brown has agreed to dismiss the suit.
Despite his company having to fork over millions, Henderson said that the company was “very satisfied” with the resolution of the case.
He continued in a statement: “We are thrilled with the result of this settlement in which we paid fair value for the historical production and immediate earning potential of these two talented teams. This group of experienced, high-quality professionals includes several award-winning sales executives from Brown, representing a significant share of the market in their respective sectors. We are gratified by their hard work while this needless litigation continued, and now look forward to their success in winning new clients, attracting the best talent, and building world class practices.”
The employees in question were hired for a national senior living practice and a condominium and homeowners’ associations practice throughout Florida.
