A federal judge on Wednesday ordered five former USI Insurance Services LLC brokers who left to join rival Lockton Cos. LLC last month to honor the non-solicitation and confidentiality clauses in its employment agreements.
The team of five brokers had sued USI seeking a ruling that the restrictions in the agreements were illegal and unenforceable when they left the brokerage.
After the brokerage team left USI, about 20 clients contacted the brokerage and said they would move their operations to Lockton, according to court papers.
To steer into Matthew Simmons, Sheila Murray, Jack Mitchell, Jackie Rodriguez, Madison Lieffort and Emily Carter v. USI Insurance Services LLC, a federal district court in Tampa, Fla., said Simmons, the leader of the team that joined Lockton, had signed an employment agreement barring him for two years from recruiting or attempting to recruit USI clients he worked with or had information about, including other and to serve 60 days̵7; notice if he has left the brokerage house.
Mr. Mitchell signed a similar agreement, and the other brokers also agreed to restrictive covenants, court papers say.
“In exchange for their agreements and employment, Simmons and Mitchell were highly compensated. In the year prior to his departure from USI, Simmons received over $3 million in payments,” the ruling said.
In previous filings, Simmons argued that USI had no “substantial relationships” with various clients that stemmed from his close personal relationships, including friendships he had developed in high school and college. Only “substantial” relationships are protected under Florida law, he argued.
However, the court held that: “Florida courts have held that an employer has a legitimate business interest in its significant relationships with specific prospective or existing customers even when an employee brings customers to the employer based on existing personal relationships.”
The court ordered the brokers to abide by the restrictive covenants until a new hearing in the case is held in about 60 days.