Insurance Non Compete Agreement

This scenario is not unusual – companies like Desmond need to protect their legitimate business interests. This is especially important for insurance brokers, as they depend not only on products, but also on maintaining relationships with the development and maintenance of the business. But are competition bans – also known as “restrictive agreements”, like these – an appropriate way to protect these interests? Some companies are moving away from competition bans in favor of no-debauchery agreements that allow former employees to work for a competitor, but limit their access to customers or previous customers. Although the courts also disapprove of such provisions, they look at them sympathetically because, unlike non-competition clauses, they do not prevent individuals from finding work in a chosen field. Leaving Graham Desmond`s brokerage, he took away a large clientele and a wealth of contact information that grew over time – a scathing blow to Desmond`s business. To ensure this doesn`t happen again, Desmond Megan and his other agents file a non-compete clause that prevents them from competing with his broker once their employment relationship is over. Megan and her colleagues must sign within 10 days or otherwise. There are, of course, differences between insurance companies in terms of financial capacity, claims handling and price. But the coverage they offer is quite standardized. It is therefore only a slight exaggeration to say that insurance agents, especially independent agents, sell essentially fungible goods. Meet Desmond, owner of an insurance brokerage company that sells commercial and private lines.

His most powerful agent has been Megan since Graham – Desmond`s former No. 1 – set out to become an intercity competitor. That was the topic in Allstate v. Sidakis. In this case, Allstate argued that the defendant recruited Allstate customers in violation of a non-compete clause. Allstate even produced statements signed by customers who claimed they were being solicited. But the defendants challenged it and the court found that the contradictory testimony was a factual issue for the trial. [8] It`s good for lawyers. Not necessarily good for insurance companies, agencies and agents. They are already spending a lot of money on all these ads. The judge found that Allstate`s non-compete clause met these requirements: the appointment as sole representative was sufficient consideration, the non-compete clause protected Allstate`s legitimate interests in its customer relations and confidential information, and the one-year period and one-kilometre radius were reasonable.

[4] Why? However, as with any injunction, it is not sufficient for the undertaking to demonstrate that the non-competition clause is applicable in order to enforce an injunction intended to impose a non-competition clause against an insurance agent. [6] Society must also prove that an injunction would be fair. . . .