CHICAGO – March 2, 2017 – Freeborn & Peters LLP is pleased to announce the latest in a string of victories for its client Brown & Brown, Inc. (NYSE: BRO), an independent insurance intermediary, against Jim W. Henderson, Thomas E. Riley, Richard T. Schwarz, II, Brian E. Lindahl, Phillip L. Masi, Negar Sharifi, Jennica A. Mandarano, Kathryn E. Bloodwell, Michael A. Randall, Danielle Mattson and AssuredPartners Inc. (AP) in a lawsuit over violations of the restrictive covenants of former Brown & Brown employees hired by AP.
On March 1, a day before the defendants were to appear before Judge Christopher France of the Seventh Judicial Circuit in Volusia County, Fla., to show cause why they should not be held in contempt for their repeated violations of the court’s temporary injunction issued against AP on Oct. 24, 2016, the parties announced a monumental settlement whereby the defendants shall immediately transfer $20 million to Brown & Brown, and are barred from hiring any further Brown & Brown employees, nationwide, for a period of time. This settlement is one of the largest reported nationwide in a restrictive covenants case.
“Our client Brown & Brown has achieved victory after victory in this series of legal proceedings,” said Michael J. Kelly, a Freeborn partner and counsel for Brown & Brown in this case. “We at Freeborn are pleased to have played a critical role in this major outcome and will continue to vigorously advocate on behalf of our client to enforce its restrictive covenants.”
The court ruled in October that there is sufficient evidence that AP, Henderson, Riley, Lindahl, Masi and Sharifi violated the valid and enforceable restrictive covenants in Brown & Brown’s employee contracts and that Brown & Brown had a substantial likelihood of prevailing on the merits of its case against AP and its employees.
The court’s October ruling also prohibited AP from accepting Agent of Record (AOR) letters on any Brown & Brown accounts while the injunction is in place and directed AP to divest itself of accounts already procured and subject to the case. However, after the October ruling and following a November hearing on alleged violations of the temporary injunction, Brown & Brown alleged that the defendants continued to violate Brown & Brown’s restrictive covenants as well as the court’s order not to solicit or service former customers of Brown & Brown. The court specifically found that Lindahl, Randall, Schwarz, Masi, Sharifi and Mandarano serviced or are working with former customers of Brown & Brown while employed at AP in violation of the restrictive covenants contained in their employment agreements, and that AP, Henderson and Riley assisted the violations and therefore entered the temporary injunction as to AP, Henderson, Riley, Lindahl, Masi and Sharifi. Momentum toward settlement shifted when Mitch Truwit of Apax Partners, the firm that holds a majority interest in AssuredPartners, reached out directly to Brown & Brown.
The legal dispute began when Brown & Brown alleged that AP, along with its senior executives Henderson (CEO) and Riley (COO), hired away top sales and support staff from Brown & Brown to join AP and assisted the former Brown & Brown employees in violating the restrictive covenants set out in their employment agreements, resulting in the loss of Brown & Brown customers, goodwill and advantageous business relationships to AP. Lindahl, Masi, Sharifi, Randall, Schwarz, Bloodwell, Mandarano and Mattson are all former Brown & Brown employees.
Counsel for Brown & Brown are Michael J. Kelly and Katheleen A. Ehrhart of Freeborn & Peters, and Thomas J. Leek, Kelly Parsons Kwiatek and Melissa B. Murphy of Cobb Cole.
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