Insurance giant Liberty Mutual Insurance is suing nine former employees and their new employer, Bermuda-based Aspen Insurance Holdings, alleging they have plotted to steal professional liability insurance business from its Liberty International Underwriters unit.
The suit, filed Feb. 1 in New York County Supreme Court, says the workers and Aspen “unlawfully conspired (and continue to conspire) to breach duties of loyalty to Liberty, raid Liberty’s business operations, and misappropriate Liberty’s trade secrets and goodwill.”
Aspen, which writes in the U.S. and United Kingdom, defended itself in a statement to Insurance Journal. “We are aware of the complaint filed against Aspen by Liberty in the New York County Court. Whilst it is not our policy to comment on ongoing litigation matters, we believe that the case is without merit and will act accordingly,” the company said.
The Liberty suit alleges that the plot was planned and executed by senior employees at Liberty International Underwriters while they were still employed by Liberty. It claims Aspen induced these employees to steal confidential information that helped Aspen build an infrastructure necessary to run a successful professional liability insurance operation in direct competition with Liberty Mutual.
The suit seeks injunctive relief and unspecified actual and punitive monetary damages.
In addition to Aspen companies, the suit targets former Liberty Senior Vice President Bruce Eisler; former Vice Presidents Rob Cunningham, Justin Camara, Ross Goodman and Ross Herlands; former Assistant Vice Presidents Judith Olivier and Susan Dufresne; and former Underwriting Specialists Bryan Nogaki and Douglas Sifert.
Liberty says all of the nine individuals quit between Jan. 14 and Jan. 20.
The complaint says Eisler and the others began communicating with Aspen in December, 2009 “to discuss the possibility of moving Liberty professional liability insurance business over to Aspen,” and began using private email addresses and not their Liberty addresses to discuss the plan.
It says that Eisler met with Aspen Holdings U.S. division president William F. Murray to plan his resignation and solicited other LIU employees to come with him to Aspen. When he resigned from Liberty on Jan. 14, Eisler “said he was taking at least five other employees with him” and turned in resignation letters for Cunningham, Camara, Goodman, Herlands and Sifert, according to the complaint.
Within days, according to the complaint, Dufresne, Olivier and Nogaki also resigned from LIU.
“The en masse departure of nine key employees of LIU’s professional liability insurance unit was clearly the result of Aspen’s conspiracy with Eisler and/or the other individual defendants, who at the time were still employed by Liberty, to recruit the Liberty employees whom they supervised. The purpose of the conspiracy is clear: to move the necessary infrastructure for a successful professional liability insurance operation — including personnel, confidential proprietary information and trade secrets — from LIU to Aspen, so that Aspen, without expending the time and funds necessary to lawfully develop a competitive professional liability insurance business, could nonetheless compete against Liberty sooner than it would be able to otherwise, and at a time when Liberty’s ability to compete would be weakened by the departure of key employees,” the complaint continues.
Liberty has been building its professional liability business since 2000.
Liberty requires employees to abide by a code of business ethics and conduct to ensure the secrecy of its information — a code Liberty alleges the nine employees breached. The complaint accuses Aspen of inducing, aiding and abetting a breach of loyalty owed by the employees.
The other causes of action against Aspen and the nine former employees include unfair competition, tortuous interference with contractual and business relationships, unjust enrichment, misappropriation of trade secrets and breach of contract.
In a statement to Insurance Journal, Liberty Mutual said that “(w)hile we cannot comment directly on the lawsuit, the recently announced restructuring of LIU’s U.S. specialty casualty team ensures that LIU continues to provide the expert underwriting service that brokers, clients and program administrators have come to expect.”
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