Aon Scores Injunction in Poaching Suit Against Alliant

A New York court has granted Aon Risk Services a preliminary injunction in a lawsuit stemming from alleged poaching conducted by former Aon executive Michael Cusack. Under the injunction, Cusack and his current employer, Alliant Insurance Services, are barred from taking customers and employees away from Aon.

In its complaint, filed earlier this year, Aon accused Cusack and Alliant of benefiting from a massive defection of former Aon employees. According to court documents, Cusack breached a noncompete agreement when he left Aon to work for a rival insurance broker and hired more than 40 former Aon employees in the process. That group included Peter Arkley, who resigned as chairman and chief executive officer of Aon Construction Services Group on June 13 to head Alliant's construction practice.

Aon's lawsuit also accuses Cusack and the other former Aon employees of improperly benefiting from confidential trade secrets. Those trade secrets include information about salaries, benefits and other employee information (Best's News Service, June 17, 2011).

Aon argues in court documents that between the defections, the loss of more than 100 customers and the loss of trade secrets, it has suffered damages in excess of $20 million. In its suit, Aon seeks unspecified economic and punitive damages.

In handing down the injunction, Judge Bernard J. Fried determined much of the testimony presented by Alliant's witnesses was "simply not believable." Fried wrote, "I do not find this testimony credible. The coordinated departure of the Aon executives on the morning of June 13, 2011, coupled for the request for a [temporary restraining order] in California within an hour of their resignations, followed by the mass exodus of Aon employees that same day, could not have happened without the prior planning by the former Alliant executives and Alliant."

The injunction forbids Cusack, Alliant or any of the former Aon Construction Services Group employees from conducting business with any Aon client they represented during the two years prior to June 13. The injunction will be in place until a full trial can be conducted.

On June 14, Aon Risk Solutions' construction services group named Kevin White CEO. White, who had been president and chief operating officer, succeeds Arkley (Best's News Service, June 14, 2011).

Aon (NYSE: AON) is second on Best's Review's list of top global insurance brokers, ranked by 2010 revenue. Alliant Insurance Services is ranked number 14 by 2010 total revenue in the Best's Review ranking of top global brokers.

Shares of Aon were trading at $46.86 a share on the afternoon of Dec. 28, down 0.55% from the previous close.

(By Jeff Jeffrey, Washington Correspondent: jeff.jeffrey@ambest.com)