A North Carolina insurance brokerage won back almost its entire case against a rival agency and seven former employees who allegedly wiped phones and laptops.
The North Carolina Supreme Court ruled on May 22, 2026 that Relation Insurance can pursue nearly all the claims it brought against Pilot Risk Management Consulting and seven former Greensboro staff, reversing a lower court that had tossed most of the case at summary judgment.
Relation sued after losing seven Greensboro employees to Pilot between late 2021 and early 2022. Four producers and three account managers – Edward Miles Gurley, Sean Kelly, Tyler Crooker, Johnathan Lancaster, Michelle Linthicum, Linda Michelle Sneed, and Toni King – jumped to the agency formed in early 2020 by ex-Relation producer Kyle Smythe.
Then the wiping started.
After Relation sent cease-and-desist letters and asked the court to preserve electronic evidence, defendants began deleting. Linthicum reset her phone the same day Relation moved for a preliminary injunction. Over the following week, Smythe, Lancaster, Capps, King, and Sneed reset their phones. Two weeks later, Gurley wiped his personal computer. Lancaster then swapped out a SIM card, and Kinney reset her phone.
When the Business Court announced that a forensic analyst would image defendants' devices starting October 25, 2022, the deletions picked up again. Gurley reset his phone that same day. Smythe and Crooker wiped cell phone data files from their laptops the next day. Sneed reset her laptop. Kelly reset his cell phone. Linthicum installed a new SIM card. Files were deleted from Gurley's laptop on two separate occasions.
According to the opinion, the forensic analyst said in more than 35 years of work he had never seen such extensive and coordinated deletions across so many electronic devices, and that the destruction had wrecked what the full picture of the data would have been.
The Business Court granted Relation an adverse inference – a ruling that lets a jury assume the destroyed evidence would have hurt the defendants' case – but didn't spell out exactly how it should apply to each claim. The Supreme Court kept the inference in place but sent the issue back so the lower court can define its scope.
The trade secrets ruling carries the most weight for the broader brokerage industry. The Business Court had decided two Excel spreadsheets weren't protectable: Gurley's Customer List, with the names and addresses of 98 Relation clients, and the Client Renewal List, with 37 clients and their policy renewal dates for medical, dental, and ancillary coverage. The Supreme Court reversed both calls.
The reasoning will land with any broker worrying about a producer walking out the door with a client book. Individual client names may be online, the Court said, but a compiled list of a brokerage's specific clients isn't. An insurance brokerage industry expert told the court that brokerages spend significant time and money to develop client lists, and that renewal lists let brokerages calendar and prioritize their staff's work with clients and insurance companies. Gurley, by his own testimony, could recall only three of his clients from memory. Most of his new Pilot clients showed up on his Relation list. And King emailed the Client Renewal List from her Relation account to her personal Gmail around the time she accepted her Pilot job.
The non-solicits ran two years for producers and one year for account managers. They barred former employees from soliciting clients or staff of the company or any other member of the Ascension Group, the parent's previous name. The Business Court called the clauses unenforceable, leaning on the Wells Fargo Insurance Services USA, Inc. v. Link decision, the North Carolina case that struck down a non-solicit tied to a sprawling corporate group. The Supreme Court sent the question back, saying the lower court needs actual evidence of Relation's size and scope before ruling.
Relation also asked the court to "blue-pencil" the agreements, a doctrine that lets judges strike unreasonable portions and enforce the rest. The Supreme Court refused, finding that Relation was effectively asking for surgical edits in more than forty places across a single contract. North Carolina's strict blue-pencil rule doesn't permit that kind of rewriting.
On the federal Computer Fraud and Abuse Act, the Supreme Court found two specific problems with the dismissal. King logged into a Relation vendor portal on April 26, 2022, nearly two months after Relation's March 1, 2022 cease-and-desist letter told her not to use or transfer any company property or confidential information, including emails, production reports, customer lists, and policy and contract renewal data. Security alerts flagged other Pilot employees, including Kinney, accessing the same portal.
Crooker, according to deposition testimony from Relation Chief Operating Officer Jill Zewalk, took expiration lists from a Relation database that producers weren't allowed to access. Zewalk described the restriction as a long-standing Relation rule. That, the Supreme Court said, could amount to exceeding authorized access if proven.
Relation lost only on unjust enrichment. The Court ruled that taking property without permission isn't the same thing as conferring a benefit, so the claim couldn't stand.
The case returns to the Business Court for fresh rulings on the non-solicits, the spoliation inference, and the trade secrets and CFAA claims now back in play.
