Insurance competitors file $30M 'employee poaching' lawsuit
The suit filed by Applied Underwriters' Centauri targets Wellington Insurance and former employees for breach of contract.
Allegations of ‘employee poaching’ have circulated across the insurance industry in recent years, and last week, the latest lawsuit in the conflict emerged.
In a complaint filed on May 1, 2020, in Sarasota County, Fla., Centauri Insurance Group alleges that Wellington Insurance Group breached a confidentiality agreement and non-solicitation provisions that were agreed upon by both parties during negotiations for Centauri’s acquisition by Applied Underwriters.
A bit of background: Applied Underwriters acquired Centauri Specialty Insurance Holdings in April 2020. During the acquisition, some Centauri employees left the company to work at Wellington Insurance, a known competitor.
Jeffrey Silver, executive VP and general counsel of Applied, commented: “We are holding that a civil conspiracy existed between the defendants to use Centauri’s confidential information to gain an unfair competitive advantage.”
The suit seeks an injunction to prevent Wellington from employing Centauri’s former employees and from using Centauri’s confidential information and trade secrets.
The suit names explicitly several defendants, including Centauri Specialty Managers’ former chief risk officer; actuary and director; director of product management; and former vice president of sales and agency relations, claiming all four were hired by Wellington.
Along with the breach of contract claim, the suit alleges that there was a violation of a non-solicitation agreement between Centauri and Wellington, which precluded Wellington from “directly or indirectly” soliciting “any current employees of the other party or its subsidiaries or affiliates with whom it has had contact or otherwise become aware of in connection with the purpose of the agreement.”
The suit also contains allegations that the four former employees breached confidentiality and proprietary rights agreements.
Applied is seeking the injunctive relief and more than $30 million in damages because the company had just expanded to nine states, and would be deeply harmed by the advantages and confidential information wrongfully given to Wellington, a known competitor.
The Court has set the hearing on Centauri’s motion for a preliminary injunction to be decided for June 8.
Editors Note: On Monday, May 12, Centauri Specialty Insurance Holdings, and Centauri Specialty Managers (CSM) were granted expedited discovery in the lawsuit against Wellington Insurance Group for breach of contract and related violations. Because this case is time-sensitive, the fact that the court has now allowed an expedited discovery process should ensure that the case is decided in a timely manner, and prevent more unnecessary losses or undue gains from occurring.
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