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NY Appeals Court Rules in Aon's Favor in Alleged Broker Poaching Case

Posted on 14 Jan 2013 by Neilson

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AonA New York appellate court has ruled in favor of Aon Risk Services in an ongoing dispute over a former Aon broker who left to join Alliant Insurance Services.

The New York appellate court affirmed an injunction against former Aon broker Peter Arkley prohibiting him from violating the non-compete provisions in his agreements with Aon, according to the court's decision.

Arkley, the head of Alliant Insurance Services' construction unit, filed the appeal in September seeking to stop a preliminary injunction that bars him or anyone under his supervision from poaching business or employees from Aon Risk Services.

Aon sued Arkley in New York, alleging claims for breach of contract, breach of the duty of loyalty and breach of fiduciary duty for his orchestration of a "raid" on Aon's employees and clients after he resigned from Aon.

We are very pleased with the Alliant ruling, David Prosperi, vice president of Aon plc, said in an email.

In a statement, Alliant said the decision was on interim rulings in the New York case, and "it did not address the ultimate merits. [It] has no impact on Alliant's business or ability to serve all of its existing clients. We are confident in our case and look forward to bringing the case to trial where the ultimate merits of the allegations will be addressed.

While Alliant also filed a case in California to challenge Aon's contract, the New York appellate court also found that Arkley was properly sued in New York, despite his contention that California was the appropriate venue. Arkley's apparent purpose in seeking dismissal of this [New York] action is to avoid his contractual obligations, the court said.

The case involves Arkley and another former Aon executive, Michael Cusack, who left to join Alliant in 2011. A total of 40 Aon employees left the same day to join Alliant, according to court papers.

The court order is the latest in a drawn-out, multi-jurisdictional legal battle between the two companies, which started in June 2011 in Cook County Circuit Court in Chicago. That case was eventually dismissed and litigation was taken up in New York in a lawsuit that was already in progress.

The other related case is in U.S. District Court in California, which was initiated by Arkley. A New York judge in July declined to defer to that case and ordered the New York case forward.

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.

With $11.3 billion in 2011 total revenues, Aon is the second largest global insurance broker, according to Best's Review. Alliant, which had $462 million in 2011 total revenue, ranked 16th largest.