What happened: A benefits brokerage alleges a departing employee used an unapproved AI tool to capture confidential client meeting notes, then kept them after joining a competitor
Who's involved: Sequoia Benefits and Insurance Services (plaintiff) and Alliant Insurance Services (competitor named in the filing)
What's at stake: Injunctive relief, compensatory and exemplary damages under federal and Colorado trade-secret law, plus contractual liquidated damages
Why it matters: Every brokerage with remote staff and personal AI tools faces the same data-governance gap this case exposes
Where it stands: Complaint filed October 1, 2026
Eighteen sets of AI-generated meeting notes, a client list spreadsheet, and a benefits calculator modified weeks after the employee left. That is the inventory at the center of a new federal trade-secrets case filed in Colorado.
Sequoia Benefits and Insurance Services, a California-headquartered compensation, benefits, and business risk advisory firm, alleges a senior client manager spent roughly four months using Granola AI — an AI note-taking application connected to her personal email — to capture detailed notes from meetings with Sequoia clients. She then resigned in July 2026 to join Alliant Insurance Services, a direct competitor, according to the complaint.
The suit, filed October 1, 2026, in the US District Court for the District of Colorado, brings five claims: breach of contract over confidentiality and return of company property, breach of a two-year employee non-solicitation covenant, trade-secret misappropriation under both the federal Defend Trade Secrets Act and Colorado’s Uniform Trade Secrets Act, and breach of the duty of loyalty.
The filing says the employee began using Granola AI in April 2026 — linked to a personal Gmail account, not a company system — and continued through July 8, 2026, the day after she resigned. Sequoia’s complaint says the tool was never approved under its workplace AI policy, which took effect in May 2025 and limits staff to AI tools “licensed by Sequoia and made available to Sequoia users via approval and provisioning by IT, or sign off by Security.”
The result, the complaint alleges, was 18 sets of detailed client meeting notes sitting in a personal account, outside Sequoia’s systems. The filing says the notes contained benefits cost analyses, healthcare spend projections, employee headcount and enrollment data, carrier quotes, self-funding analyses, client growth and acquisition planning details, and carrier network disruption strategies — all information the complaint describes as “particularly valuable” because it relates to the plan year beginning January 1, 2027.
Sequoia had approved alternative AI note-taking tools that would have kept data within the company’s own systems, the complaint states.
The filing emphasizes that the departure landed in the middle of renewal season. Most benefit plans Sequoia administers run on a calendar year, with plan designs typically finalized in September or October and open enrollment beginning six to eight weeks before year-end. A competitor holding a client’s projected healthcare spend, enrollment data, carrier quotes, and self-funding analysis during this window “would know the cost pressure the client faces, the terms Sequoia is positioned to offer, and the precise points at which a competing proposal could undercut Sequoia,” the complaint states.
Beyond the AI notes, the filing alleges the employee retained 23 emails exchanged between her work and personal accounts — including one with the subject line “client list” — and six files in a personal Google Drive. One of those files, a benefits effective date calculator, was allegedly last modified on September 10, 2026. That is nearly two months after she left and a week after Sequoia sent a cease-and-desist letter.
No explanation for that modification appears in the filing.
Sequoia says it followed standard offboarding procedures, including an exit checklist the employee signed on July 9, 2026. The complaint alleges she listed only a computer, charger, monitor, and iPhone as company property in her possession — without disclosing the emails, files, or AI-generated notes.
None of that came to light until after Sequoia’s outside counsel sent a demand letter on September 3, 2026, the filing says. The response from the employee’s counsel acknowledged that a remediation process “identified and removed a limited number of Sequoia work-related files” from her personal Gmail, Google Drive, and Granola AI accounts. But Sequoia says it received only PDF copies of the emails rather than native files, no metadata, and no access to forensic reports or search details.
The complaint also alleges the employee participated in a group text thread with current Sequoia staff after joining Alliant, commenting favorably on Alliant’s compensation, recognition as a “Best Places to Work,” and administrative support. Another senior client manager on that thread resigned and joined Alliant on September 1, 2026, the filing states. Sequoia alleges this breached a two-year non-solicitation restriction running through July 2028, triggering a contractual penalty set at 50% of the departing colleague’s trailing 12 months of compensation.
Sequoia is asking the court for a temporary restraining order that would require the employee to hand over all devices and account credentials to a neutral forensic examiner within five days. It is also seeking broader orders barring use of any Sequoia data to service, price, or prepare proposals for affected clients.
The case lands as brokerages across the industry wrestle with where personal AI tools end and company data begins — a line that most workplace AI policies are still catching up to.
The allegations in the complaint have not been tested, and no court has ruled on the merits of the claims.
