Insurance Journal Forums

Happy March and CPCU Ethics Month. Last year I offered a few cases that seemed to be well received. I thought I'd try a few more...

You are the vice president of sales at a 50 employee agency. Your wife is best friends with the wife of one of your producers.

After a party your wife mentions that her friend's husband is planning on leaving the agency and is talking about taking client lists and other proprietary information.

What do you do?

Who "owns" the business in this case? The agency or the producer? Is there a contract?

Assume a non-compete is in force.

This seems pretty clear cut to me, regardless of any contract or non-compete. As sales manager, your duty is to your employer. You must advise your boss what you have learned. Your duty is NOT to your wife's friend. Also, if the employee's wife was that free with the information, this will get out and you better be the first to advise your employer.

If you don't have contract stating you own the the book of business, it is a crime in California to take a client list with you when you leave. It can be litigated in both civil and criminal court in this state. Contacting the clients is illegal after you leave!!

This creates a great opportunity.

The question does not only refer to the law, or even just ethics. Where I think Scott is going with this is how the relationship with the VP's wife will be affected, the wife's relationship with the other wife, and I presume the employee considering the move may be a social friend as well, considering the two wives were at a social function...

Here is my version of how to handle it... The industry is rife with examples of how other agencies have dealt with such situations. I would find a reason to share one of these "examples" with the entire sales staff as part of their on-going training on proper business ethics. It gives the VP an excellent "reason" to approach this topic without focusing on the one employee, plus, with a 50 employee group there will be others considering employment changes in the future.

Approaching the situation as a regular part of agency training does not violate his wife's confidence, and gets the point across to EVERY producer. And, if the guy does still leave and tries to steal the list, the VP has documented proof that he not only discussed it with the ex-employee in person, but the entire staff.

Just my two cents...

Swymmer

Swymmer has a very interesting comment. Which actually does a good job of protecting all parties.
Obviously the producer will likely wonder (if not figure out) about the interesting timing!

I like Swymmer's plan of action, too, but don't know if I would so much care about violating the wives' confidences with each other. How stupid is the producer's wife to tell this plan to the boss's wife?