California-based insurance broker Alliant is again being sued over an alleged poaching scam, this time by rival Arthur J. Gallagher & Co.

Gallagher claims Alliant, with assistance and capital from its private equity partner Stone Point Capital, has engaged in an aggressive and brazen solicitation campaign and unlawfully taken 39 employees and more than 80 clients.

In its complaint, Gallagher contends that Alliant has been illegally poaching employees and clients, stealing confidential information, and copying Gallagher documents and rebranding them as Alliant’s own.

Gallagher filed its complaint Sept. 14 in Delaware Chancery Court, the same court where in 2019 insurance broker Lockton won an injunction that banned Alliant from soliciting or servicing clients, prospects and Lockton employees. In the Lockton case, Vice Chancellor J. Travis Laster found that Alliant “engineered” and “coordinate[d]” a sweeping raid against Lockton.

Alliant is attempting to have the case moved to federal court, arguing that it qualifies because the dispute is between firms of different states. Alliant changed its domicile from Delaware to California last year after the Lockton case. Gallagher says Alliant’s redomicile was done to avoid the court that ruled against it. Gallagher argues that Alliant was a Delaware corporation when its raid on Gallagher began and Stone Point remains a Delaware limited liability company.

Alliant accuses Gallagher of “forum-shopping and judge-shopping” by bringing the case in the Delaware state court where Lockton recently won. Alliant also argues that Stone Point Capital should not be a party to the suit and notes that Gallagher did not include Stone Point in its similar lawsuits in other states. Gallagher has pending suits against Alliant and ex-employees in the states of Florida, Texas and California — states where the allegedly poached employees are located.

The Playbook

Gallagher claims that in its solicitation campaign against its operations, Alliant has simply tweaked the “playbook” that it used against Lockton and others. The complaint cites reporting by The Insurer that over the course of the last 24 months, Alliant has been sued more than a dozen times by competitors including Aon, Marsh, JLT, USI, Alera Group and AssuredPartners for raiding employees and customers. A number of the cases have been settled.

The Gallagher complaint says that Alliant “euphemistically” calls its raids on competitors “add-on acquisitions”— but Gallagher insists they are not acquisitions because Gallagher owns the books of business, not the employees lured away. In some cases, Gallagher had acquired the business from the employees for significant sums, the complaint says.

According to the Alliant “playbook” as Gallagher describes it, Alliant learns what targeted employees are being compensated and the size of their books of business and then offers them “outsized compensation packages” in order to induce them to breach their fiduciary and contractual duties. Their departures are highly synchronized and planned well in advance, with little or no notice to Gallagher. In some cases after they resign, the employees have been instructed to fill out online job applications on Alliant’s website and then, within minutes, they have appeared with job offers in hand, with no background checks and no requests for references.

The employees targeted with “oversized compensation” proceed to violate the non-solicitation provisions in their agreements with Gallagher, soliciting clients to transition business to Alliant and soliciting colleagues to work for Alliant, according to Gallagher. These employees also violate provisions in their contracts regarding the use of confidential information, often sending documents about Gallagher accounts and business strategies to their own personal email accounts that Alliant then uses for its own benefit.

Gallagher says Alliant coaches the targeted hires to “tell a story about why they left their old jobs and why their actions do not violate” their ongoing restrictive covenants.

The complaint details multiple cases where employees resigned and information and accounts were transferred to Alliant.

An Alliant executive reassured one targeted hire at Gallagher that the playbook has “never failed,” the complaint says.

The suit claims Stone Point, which holds three of the eight seats on Alliant’s board of directors, funnels capital into Alliant that is used to fund the raids.

To date, Gallagher claims Alliant has “successfully poached” a total of 39 employees, “solicited scores of Gallagher clients, and diverted the brokerage, consulting, or benefits business of dozens of those clients, stripping Gallagher of longstanding client and employee relationships and the cross-selling and growth opportunities that inherently come with them.”

Gallagher says it has no reason to think that Alliant is going to stop any time soon. “In fact, such ‘leveraged’ or ‘add-on’ acquisitions are integral to Stone Point and Alliant’s plan for growth,” Gallagher believes.

“Rather than play by the rules, Stone Point and Alliant wantonly break them,” Gallagher charges.

Gallagher says the revenue lost or at risk because of the raids cannot be readily quantified at this time but “easily rises to the level of tens of millions of dollars.”

Gallagher is seeking an order preliminarily and permanently enjoining Alliant’s conduct as well as damages for the quantifiable injuries that Alliant’s actions have already caused, and that Gallagher may continue to suffer.

Alliant did not reply to an email asking for comment on the allegations in the complaint.

*This story ran previously in our sister publication Insurance Journal.