Reports that Howden, part of London-based insurance brokerage Howden, has lured more than 200 employees from Brown & Brown Insurance have led industry leaders to fear that poaching may be the new business model for some companies. And Florida-headquartered Brown & Brown wasted little time in filing a lawsuit against Haddon, accusing the firm of numerous legal violations.
“This case is one of the most massive, calculated and predatory schemes of trade secret theft, breach of contract, breach of fiduciary duty, tortious interference, and unfair competition of the brokerage industry.”
This is the fourth lawsuit against Howden Companies this year, in which Howden is accused of illegally hiring hundreds of employees from big-name rival insurance firms, including Aoun, Marsh and Willis Towers Watson.
“It’s just not doing it,” said one longtime Florida insurance broker, who asked not to be named. This is the way it works. “
Others said the alleged illegal hunting practices reflect a growing “retail war” as insurance companies and brokers scramble for market share that has been transformed in part by tort reform and reduced litigation costs in Florida, Georgia and other states.
And it’s not just property insurance. Some major auto insurers are now offering agents a $200 bonus for each new policyholder, an executive said.
“Not everyone can afford to do that,” said Don Mosser, president of Emmons Specialty Auto Insurance of Florida. “It’s a real battle going on now.”
News broke earlier this week that Howden had hired 100—then 200—and possibly more—people from Brown & Brown, an 86-year-old firm that has grown into one of the largest U.S. brokerages, with 700 offices nationwide and 23,000 team members. Brown and Brown called an emergency company-wide meeting last week, warning other colleagues not to jump ship, insiders said.
Representatives for Brown and Brown & Howden could not be reached for comment. But Haddon, which only established its US affiliation a few months ago, appears to have raided other companies as a business model, legal experts said.
“It’s been a pattern with Howden. I can’t recall another insurance company coming into the U.S. and not being fine with raiding other companies,” said Lynn Thomas of Thomas Consulting, which specializes in client retention strategies for corporations.
He suggested that insurance brokerages, agencies and carriers double-check their employees’ non-compete agreements and their compensation packages. Haddon reportedly offered large bonuses and salaries to high-performing employees who made the switch.
“What was Hodden’s offer? It might be true,” Thomas said.
Randy Stutz, president of the American Antitrust Institute, said that from a free-market perspective, non-litigious companies may be infuriated, but it’s generally good for employees.“It’s not going to be good for the industry or the company, but it’s healthy competition, and that’s how the market is supposed to work,” Stutz said.
A more harmful practice is seen when owners of competing companies or franchises collude No To hire each other’s workers, limiting employee mobility and advancement, he said.
The Brown & Brown lawsuit complaint, seen here, names Haddon as a defendant along with 32 former Brown employees. The lawsuit alleges that the workers “with the help of their new employer, Howden US Services,” attempted to eliminate the plaintiffs from the inside, “by orchestrating a secret, simultaneous, no-advertisement notice, mass hiring of approximately 200 employees from competing offices across the country, and immediately using Hanno as more and more Hanno customers, and immediately conducting a campaign to steal from the plaintiffs.” to mount a campaign, seeking judicial relief for the plaintiffs before the defendants complete the demolition.
The complaint alleges that leaders of Brown’s profit center in Massachusetts and the Northeast Regional Leader coordinated the raid. It also includes what appears to be text messages, printed, telling employees they will receive messages from Howden’s human resources department, reminding them to tender their resignations to Brown by Dec. 19.
The lawsuit seeks injunctive relief, monetary damages, including punitive damages, and attorneys’ fees against Howden.
Related: Aoun adds to list of pimps suing Haddon for alleged poaching, theft
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