Trade secrets and unfair competition complaint - Gallagher v. Alliant Insurance

Arthur J. Gallagher & Co. filed a federal lawsuit Thursday against Alliant Insurance Services, Inc. In the Northern District of Illinois. 


The 43 page Complaint alleged several different causes of actions including:


I. Tortuous interference with a contract;

II. Tortious interference with prospective economic advantage; 

III. Aiding and abetting breach of fiduciary duty; and 

IV. Conspiracy. 


While each element requires a fact-intensive analysis, there are several themes and considerations to consider as they play out. First, the crux of the dispute arises as Alliant allegedly has repeatedly recruited employees from Gallagher. 


Per the Complaint, as they are recruited, they are asked to retain certain types of confidential information. In doing so, this places Gallagher in a precarious situation and requires that the employees not fulfill their duty of loyalty to Gallagher during the course of their employment. 


While several fact patters stand out, an additional one, is the allegation that Alliant improperly directs its employees to include attorneys on non-legal email communications as to avoid disclosure through discovery. While if true, it would appear to in all likelihood be a worthless endeavor, it’s an interesting additional factoid that is included in the Complaint. 


Furthermore, Gallagher alleges that Alliant’s “Prospective Employee Departure Protocol,” and its “Remediation Program,” which are said to serve the purpose of compelling former employees of competitors to go through a formal process, is merely a front. Specifically, Gallagher alleges it’s all a “sham.” While the Complaint states that Alliant even goes so far as to indemnify employees of former competitors, there is no specific facts pled that suggest this to be true.  


Furthermore, Gallagher claims that Alliant’s “facade” of a remediation program is a method to avoid third-party disclosure of potential breaches of trade secrets. 


Notably, this is not the first time Alliant has been the subject of a lawsuit of this nature. The Complaint contains roughly two full pages of various cases which have been filed all across the country, by a wide variety of competitors for similar actions. 


Gallagher seeks injunctive relief and makes an additional mention of the sheer number of suits which have been filed against Alliant. The Complaint alleges that recent publicity disclosed documents indicate that the “leveraged hire strategy” is a well orchestrated and developed element of its overarching business strategy. 


Not only is the poaching planned, but it’s also apparently very much meant to stir up litigation, at least according to the Complaint. Gallagher also claims that while Alliant’s plan is to spend significant funds on litigation to force a settlement, this is also because the group knows how profitable it is to poach competitors’ workers, and in turn their clients. They have done the cost benefit analysis. 


In the end, Gallagher seeks injunctive relief, damages, punitive damages, and of course, such other and further relief that the Court deems just and proper. While the Complaint effectively makes the case to question the ethics certain business strategies employed by Alliant, it appears to be rather susceptible to a FRCP Rule 12(b)(6) Motion to Dismiss for Failure to state a claim for which relief can be granted. Nonetheless, the fact-intensive questions are surely likely to result in the alleged desired outcome by Alliant, a settlement. 

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