COURT RULES AGAINST INSURANCE EXEC IN NONSOLICITATION DISPUTE

A lawsuit involving a top Hawaii executive who resigned from an insurance company and took former clients and employees with him to a rival firm has business people talking about loyalty, relationships and professional obligations.

The case is Marsh USA Inc. and Marsh & McLennan Companies v. Chad W. Karasaki. Chad Karasaki, left Marsh's Honolulu office in mid-March to become CEO of competitor, Aon Risk Service in Honolulu. The following month, Aon announced it hired four new employees, all vice presidents and senior vice presidents from Marsh's Hawaii office. Marsh sued Karasaki, a 22-year employee, for violating a nonsolicitation agreement.

Nonsolicitation agreements can prevent departing employees from taking fellow workers to a new job or is sometimes used as a form of noncompete and prohibit the departing employee from "soliciting" his previous employers' clients and customers.

In this case, Marsh was awarded a preliminary injunction against Karasaki that barred him from either soliciting or working on behalf of Marsh clients or potential Marsh clients, and from recruiting Marsh employees.

My Take: Negotiate these agreements on the "front-end" before you take that new job!