Lockton Secures Legal Win in Dispute with Former Employee in Kansas City
In a recent turn of events, Kansas City-based Lockton Cos. has emerged victorious in a legal showdown against former employee Eric Kaufman, potentially allowing the company to recover at least $1.6 million in attorney fees. The U.S. District Court for the Western District of Missouri upheld Lockton’s nonsolicitation clause, confirming that Kaufman cannot solicit or interfere with certain client relationships for a period of two years following his departure from the company.
The Background
Eric Kaufman, who worked for Lockton from 2004-2022 and last served as senior vice president in California, left the insurance brokerage to join Alliant Insurance Services in a similar role. Lockton and Alliant have been embroiled in multiple lawsuits, often regarding allegations of former employees departing and supposedly trying to woo clients away.
Following Kaufman’s resignation, Lockton filed a lawsuit against him in July 2022, citing breaches of his employment agreement. The company alleged that Kaufman retained and disclosed confidential information, solicited clients improperly, and interfered with Lockton’s potential business relationships. They also accused him of violating the U.S. Defend Trade Secrets Act and the Missouri Uniform Trade Secrets Act.
The Court’s Ruling
Interestingly, Lockton chose to dismiss most of its breach of employment contract claims against Kaufman, yet managed to secure an important ruling regarding the validity of its nonsolicitation clauses. Judge Stephen Bough ruled that any litigation regarding Kaufman’s employment at Lockton should proceed in Missouri, not California, where Kaufman initiated legal action. This decision underscores the court’s determination on the appropriate venue for such disputes.
While the judge ruled that he couldn’t settle the issue of attorney fees in the California case until it’s concluded, the groundwork has been laid for Lockton to recover significant legal costs. According to reports, Lockton has already incurred approximately $1.6 million in legal fees and continues to rack up costs.
Moving Forward
Lockton is also pursuing recovery of attorney fees from the Missouri case, and with the recent rulings, the company is feeling optimistic. Lockton spokesperson Julie Gibson emphasized the significance of the ruling, stating, “The central issue in this case was the enforceability of Mr. Kaufman’s restrictive covenants following the termination of his LLC membership interests.” This suggests that the court’s decision may set a precedent for other legal matters involving Alliant, who funded Kaufman’s defense.
On the other side of the equation, Kaufman has expressed his elation regarding the dismissal of several claims against him. In a spirited email statement, he asserted, “Lockton has abandoned its claims to avoid trial. I was hoping to have the opportunity to tell a jury my story. I did no wrong. Lockton used its lawyers to attack me, and they lost. They ran for the hills to avoid a trial.”
Conclusion
With Lockton securing a substantial legal win, this case might not only influence the ongoing tension between Lockton and Alliant but also shape how the industry navigates employment contracts and competitive practices. The verdict provides a clear mandate on the enforceability of nonsolicitation clauses and indicates that companies will continue to uphold their interests vigorously.
As the case unfolds further, both parties will undoubtedly keep their eyes peeled for the next developments, ready to react to whatever comes next in this intricate legal tapestry.
