Willis Towers Watson Files Lawsuit Against Lockton over Employee Exit

Willis Towers Watson (WTW) has taken legal action against Lockton Companies and 18 former employees from its Northeastern construction insurance team, alleging improper conduct during a mass departure on August 19.

In court documents filed with the Boston Superior Court, WTW claims these employees rapidly resigned within a 44-minute timespan. They are accused of transferring $5 million in annual client revenue and proprietary information to Lockton, allegedly breaching non-solicitation and confidentiality agreements. WTW argues that the restrictive covenants in question are standard industry practice, pointing out that Lockton implements similar agreements for its staff.

Legal Ramifications and Industry Practices

WTW is seeking a temporary restraining order and preliminary injunction from the court to prevent further interactions between Lockton and the transferred clients, enforce employment agreements, nullify recent client policies, and recover any benefits Lockton gained. The firm's legal stance underscores the industry norm of restrictive covenants, essential for protecting client relationships and proprietary data.

"Lockton should be required to disgorge the client relationships that it wrongfully obtained from WTW."

— Willis Towers Watson statement to the court

The lawsuit also notes a similar situation where Lockton previously sought legal remedies, illustrating the competitive sensitivities in the brokerage industry. High-profile figures like Michael Scott and Thomas Grandmaison are identified as pivotal in the transition, impacting operations mainly at the Boston office, with effects reaching Pennsylvania and Alabama.

Industry Implications

• Potential precedence for enforcing restrictive covenants across the insurance sector.
• Highlighting the importance of robust compliance frameworks to prevent similar disputes.
• Risks associated with sudden workforce transitions impacting client retention and revenue.

Lockton has declined to comment on the ongoing litigation, leaving industry observers to speculate on the broader implications for employee mobility and competitive practices in the insurance brokerage field.