AssuredPartners asks court for restraining order against EPIC insurance

After Rick Frechmann, Joleen Mayfield, and Brad Snitzer left its employment, AssuredPartners (AP) filed a lawsuit in December 2024 against EPIC and three former employees - alleging breach of contract, misappropriation of trade secrets, tortious interference, unjust enrichment, and breach of the duty of loyalty. AP claimed that after the defendants left the company, they improperly solicited AP clients and took confidential information with them.

In its TRO motion, AP sought to prevent the former employees from engaging in business with AP’s clients, arguing that their actions caused significant financial losses and irreparable harm to its goodwill. However, the court found that AP failed to prove that an injunction was necessary.

The case hinges on the enforcement of Restrictive Covenant Agreements (RCAs) that the defendants signed while at AP. These agreements contained the following clauses:

• Non-solicitation clause: Prevents former employees from soliciting, selling, quoting, placing, or servicing insurance products for AP clients for two years after leaving the company. It also prohibits them from inducing AP’s business partners to diminish or end their relationships with the company.
   
• Confidential information clause: Defines confidential information as non-public details about AP’s clients, contracts, pricing, business strategies, and insurance markets. The clause prohibits employees from using or disclosing such information after leaving the company.
   
• Restricted clients clause: Identifies AP’s clients from the past two years as “restricted clients”, meaning that former employees cannot conduct business with them during the restricted period.

US District Judge Sarah E. Pitlyk denied AP’s TRO request, citing the company’s failure to demonstrate irreparable harm. “A temporary restraining order is an extraordinary and drastic remedy.”

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The ruling emphasized that:

• AP’s primary alleged harm - losing six clients and 21 insurance policies - was a financial loss that could be addressed through monetary damages, making an injunction unnecessary.

• AP failed to provide concrete evidence that its reputation or goodwill had suffered beyond measurable financial losses.

• The court was not convinced that AP would continue to lose clients at a rate that justified emergency injunctive relief.

The ruling does not dismiss AP’s broader claims but sets the stage for further litigation, including a potential preliminary injunction hearing.

All three denied soliciting ex-AP clients, although they said that some clients had called them after seeing news stories about their move, or seeing the change of employment announced on LinkedIn.

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The court ordered both parties to meet and submit a proposed schedule for limited discovery and briefing on a preliminary injunction motion. This schedule, due by March 14, 2025, will determine the timeline for the next phase of litigation.

The case raises significant legal questions about the enforceability of restrictive covenants in the insurance industry and the extent to which former employees can engage in business with previous clients. For now, however, EPIC and its newly hired employees are free to continue their work without court-imposed restrictions.

Case name & court: AssuredPartners, LLC v. Edgewood Partners Insurance Center, Inc., et al., U.S. District Court for the Eastern District of Missouri