Insurance Broker Fights Ex-Employees Over Alleged Contract Breaches
AssuredPartners (AP), an insurance brokerage, is currently embroiled in a legal battle to prevent former employees from allegedly violating their employment contracts. The case, filed in December 2024, involves EPIC and three former AP employees: Rick Frechmann, Joleen Mayfield, and Brad Snitzer.
AP’s lawsuit alleges several violations, including breach of contract, misappropriation of trade secrets, tortious interference, unjust enrichment, and breach of the duty of loyalty. The central claim is that the defendants improperly solicited AP clients and took confidential information after leaving the company. In an attempt to protect its interests, AP initially sought a Temporary Restraining Order (TRO) to prevent the former employees from conducting business with its clients, arguing significant financial losses and irreparable harm to their goodwill. However, the court has denied this request.
The court emphasized that AP failed to demonstrate the necessity of an injunction, as the primary harm—the loss of six clients and 21 insurance policies—was a financial loss that could be addressed through monetary damages. Furthermore, the court wasn’t convinced that AP’s reputation or goodwill had suffered beyond measurable financial losses. The court concluded that there wasn’t sufficient evidence to suggest AP would continue losing clients at a rate justifying immediate injunctive relief.
The legal dispute hinges on the enforceability of Restrictive Covenant Agreements (RCAs) signed by the defendants. These agreements included crucial clauses:
- Non-solicitation clause: This clause restricts former employees from soliciting, selling, quoting, placing, or servicing insurance products for AP clients for two years after leaving the company. It also prevents them from inducing AP’s business partners to end or diminish their relationship with AP.
- Confidential information clause: This defines confidential information as any non-public details about AP’s clients, contracts, pricing, business strategies, and insurance markets. The clause prohibits employees from using or disclosing this information after their departure.
- Restricted clients clause: This identifies AP’s clients from the past two years as “restricted clients,” preventing former employees from conducting business with them during the restricted period.
While the TRO request was denied, the lawsuit itself continues. All three former employees deny soliciting ex-AP clients, although they admit some clients contacted them after their moves were publicized in news stories or on LinkedIn. The court has ordered both parties to submit a proposed schedule for limited discovery and briefing on a preliminary injunction motion by March 14, 2025, setting the stage for the next phase of litigation. The case raises essential questions concerning the validity of restrictive covenants in the insurance industry and what limitations exist on former employees’ ability to engage with previous clients. For now, EPIC and its newly hired employees are free to continue their work without court-imposed restrictions.
Case Name & Court: AssuredPartners, LLC v. Edgewood Partners Insurance Center, Inc., et al., U.S. District Court for the Eastern District of Missouri
