The departing employees allegedly took with them clients who generated over $5 million in annual revenue for WTW, according to Boston.com. And WTW is concerned Lockton may be going after additional clients.
Unsurprisingly, WTW has filed suit, but the question is whether it is likely to win. And the answer may not be as clear as you’d think.
Insurance brokerage giant claims “brazen, severe, and outrageous” conduct
Willis Towers Watson is understandably upset that 18 of its employees left to work for a competitor, and it has filed a lawsuit asking the court to grant both a temporary restraining order and a preliminary injunction to prevent Lockton from servicing the accounts the employees took with them, and to stop the company from continuing to solicit other clients or employees.
As WTW’s court complaint states, Willis Towers Watson believes this injunction is necessary because “The size and significance of this raid, and the egregious way Defendants systematically sought to pilfer WTW’s client relationships, require commensurate relief.”
WTW also claims Lockton’s conduct and that of its employees was “brazen, severe, and outrageous,” and that the mass departures clearly indicate that Lockton orchestrated a “smash and grab” of both its customers and staff.
Did Lockton and the employees do anything wrong?
Since no court hearing has been held, it’s not clear whether misconduct occurred. However, experts weighed in on the rules that apply and, despite the brazenness of the mass departures, WTW isn’t necessarily guaranteed a win.
“There’s generally nothing inherently unlawful about a competitor recruiting another company’s employees, even a large number of them at the same time,” Ryan Eddings, a California labor and employment attorney at Hanson Bridgett LLP, told Moneywise. “The fact that 18 employees resigned within 44 minutes may be compelling evidence that the departures were coordinated, but coordination itself is not necessarily a legal wrong.”
Edwin Aiwazian, CEO at Lawyers for Justice, agreed, telling Moneywise, “The fact that 18 employees resigned within 44 minutes is certainly something that draws your attention, but the fact that they coordinated their resignations doesn’t mean that the resignations were unlawful. It is generally the case that employees have the right to quit their jobs.”
However, this doesn’t necessarily mean WTW has no grounds to pursue a claim. “The important issue is what took place before those resignations and what happened afterward,” Aiwazian said. “If the employees had been actively diverting business, using confidential information, or breaching enforceable contractual obligations, then a completely different situation would have been created.”
