Employee exodus prompts lawsuit.

Byline: Sherri Buri McDonald The Register-Guard

People job hop all the time. But when a dozen employees left Eugene insurance brokerage Willis of Oregon Inc. this month to work for a new competitor, Willis filed a lawsuit alleging that the competitor is systematically trying to raid its office by stealing its employees and clients.

Willis filed the lawsuit on Aug. 4 against California-based ABD Insurance and Financial Services Inc. in U.S. District Court in Eugene. The lawsuit alleges that ABD, which is preparing to open an office in Eugene, unfairly competed with Willis and interfered with Willis' contracts with its employees. Willis is asking for damages of up to $100 million.

ABD has not yet filed a response to Willis' complaint. But in other legal filings, ABD denies Willis' allegations.

These types of cases "are probably becoming more common," said Thomas Mackey, a partner specializing in employment law in the Los Angeles office of Jackson Lewis, which doesn't represent either party in this case.

"We've seen a fair number of these," Mackey said. "It's difficult to know whether that is because this sort of mass hiring activity is on the rise, or whether simply people are becoming more creative in trying to find ways to stop it."

Most courts have not concluded that the movement of a large number of employees from one competitor to another is unlawful, Mackey said. They're requiring plaintiffs to show that some unlawful act accompanied the recruiting activity, he said.

Willis claims that ABD acted unlawfully. Along with filing its complaint, Willis also asked the court for a temporary restraining order to stop ABD from soliciting or hiring Willis employees; from misappropriating and using their trade secrets; and from accepting business from clients of former Willis employees for two years after they leave Willis.

Judge Michael Mosman denied that request last week but did restrict former Willis employees working for ABD from using Willis' computer systems, according to a court document.

In legal papers, ABD said that it has instructed its former Willis employees who have noncompetition agreements with Willis or agreements limiting solicitation of other Willis employees to honor the terms of those agreements. ABD also hasn't requested or received any confidential information from employees who formerly worked for Willis, according to the filings.

ABD declined to comment beyond the following prepared statement:

"With respect to recent allegations by the Willis Group, we believe that the ruling of the Federal Judge in Oregon says all that is necessary," said Dan Francis, president and CEO of ABD Insurance and Financial Services. "Their motion for a temporary restraining order was denied.

"For decades, people have been coming to work at ABD because they choose to - because they embrace our client-focused culture and share our strong, traditional values. Our clients choose us and stay with us for very similar reasons."

Willis representatives declined to comment for this story.

The filings show two corporate parents battling it out in court.

Willis of Oregon is a subsidiary of Willis Group, which trades on the New York Stock exchange and is based in the United Kingdom.

ABD is based in Redwood City, Calif., and has offices in California, Nevada and Washington. It's a member of the Greater Bay Bancorp family of companies.

The exodus of Willis employees began when former CEO Paul Weinhold resigned July 31 to work for ABD.

Since then, at least 12 Willis employees have moved to ABD, according to Willis' legal filings. The employees are a mix of "producers," who identify and solicit prospective clients, client managers, office managers and marketing pro- fessionals.

"That number is staggering - in just days, ABD has raided nearly 20 percent of Willis' work force from its Eugene office," Willis said in legal papers. If ABD is allowed to continue, "it would result in Willis having to effectively lose the operation it has built over a 30-year period and essentially start anew by rebuilding its office," the papers said.

In a sworn statement filed with the court, Weinhold said he hasn't solicited any Willis employees to work for him or any other competitive company. He did say, however, that he had had numerous conversations over the past several years with a fellow Willis employee about the "various problems with the Willis organization and the spirit of discontentment that prevailed in the office."