AJG’s claims came in response to actions filed in July and August by Newfront, in which the InsurTech asked a Massachusetts court for declaratory relief against the possibility of being sued by the larger brokerage firm for its recent recruits.
In late July, Newfront sought relief for two former AJG employees – Louisa Bolick and Erika Papadopoulos – who were also named as plaintiffs. In mid-August, the company submitted an amended complaint in which two more executives joined as plaintiffs: Michael Talmanson and Brian Kelleher.
Talmanson, Bolick and Kelleher became founding partners of Newfront’s Boston office, which launched in late August with nine members.
AJG denied Newfront’s claim that Gallagher’s use of restrictive covenants for two years following the plaintiffs’ departure is “invalid and unenforceable”.
“Having successfully coordinated its mass departure (including with two executives who had taken Gallagher confidential information), Newfront now puts forward a false narrative of wearing the ‘white hat,’” read AJG’s disclosure, viewed by Inside P&C.
According to the documents, eight employees departed from its Boston office to Newfront between June 30 and July 12. The four plaintiffs joined Gallagher in 2015 when the brokerage firm acquired William Gallagher Associates Insurance Brokers for $150mn in cash and equity.
Gallagher rebutted Newfront’s argument that goodwill pertinent to client relationships belonged to individual plaintiffs.
According to AJG, the four plaintiffs all signed agreements not to provide services to clients acquired by Gallagher in the merger for two years if they were to leave. Among them, Talmanson, Bolick and Kelleher received compensation between $172,000 and $900,000 for their shares in the acquired entity.
The brokerage firm added that it provided plaintiffs access to its “most sensitive and confidential information and trade secrets,” as well as investing in them to develop customer goodwill.
“Individual Plaintiffs now seek to misappropriate that client goodwill and avoid their post-employment obligations to Gallagher,” read the disclosure.
Gallagher also accused Kelleher and his colleagues of sending over 100 documents containing confidential information and trade secrets to their personal email accounts. This included presentations for clients and a 43-page spreadsheet with details on “hundreds of Gallagher clients and more than one thousand different insurance policies”.
Newfront claimed it worked with a third-party vendor to remove any of AJG’s remaining information from the plaintiffs’ personal devices and email accounts. But Gallagher argued it had “insufficient” knowledge to form a belief on this allegation, saying the remediation efforts seem to have been “inadequate”, according to its review of the report sent by the InsurTech.
AJ Gallagher declined to comment. Newfront did not respond to a request for comment.
