Marsh & McLennan Cos.’s reinsurance broker sued a London rival, saying it secretly planned an unethical “raid” of 38 people across Europe, in the latest lawsuit to pore over clandestine staff poaching allegations.
Guy Carpenter & Co. said that its competitor, private equity-backed Howden Group Holdings Ltd., went on a hiring spree of its senior staff, including the head of its European business, at the end of March. Waves of resignations followed over the next few days, with one employee writing in a message that Howden conducted “a raid on our company.”
City firms regularly take to the courts to stop rivals swooping for staff, and in the increasingly-small and consolidating world of reinsurance broking, there are just a few key individuals with the contacts and long-term relationships needed to negotiate on behalf of clients.
In a ruling published Wednesday, the judge said that this was at least the third legal action brought against Howden by Guy Carpenter in recent years. The Howden companies have a “track record” of arranging team moves, lawyers for Guy Carpenter said.
The judge said Howden was yet to formally defend any of the allegations in the lawsuit and a spokesman separately declined to comment but the firm has agreed to stop any further recruitment of Guy Carpenter staff ahead of a the judge-ordered speedy London trial later this year.
Howden counts major funds General Atlantic LP, Hg Capital and Canadian pension fund Caisse de Depot et Placement du Quebec as external investors following a wave of mergers of insurance brokers. About one-third of the firm is owned by employees.
Guy Carpenter sued a number of Howden companies including its founder David Howden and other former executives. A spokesman for Guy Carpenter said in a statement that Howden “unlawfully and unethically coordinated a raid on our business with blatant disregard for the law and Guy Carpenter’s rights.”
The case began when Massimo Reina, Guy Carpenter’s chief of its European business, and “one of the most trusted and senior employees,” resigned on the evening of March 27. Reina acted as a “recruiting sergeant,” whose job it was to persuade other employees to join him, Guy Carpenter’s lawyers alleged.
The executives are “are senior staff earning substantial sums who, on the evidence before me, deliberately set out on a course of conduct, which involved them breaching their contracts of employment,” Judge David Lock said.
Reina is alleged to have used an off site management meeting to recruit a senior executive weeks before his resignation, Guy Carpenter’s lawyers said in a court filing. Reina told the executive he would receive a sign-on bonus of €500,000 ($546,680) and bonuses likely to exceed €1 million.
Guy Carpenter’s lawyers also disclosed a series of what they called “troubling” messages from former staff two weeks before they resigned to join Howden. “See you in a bit…Judas,” wrote one former staffer.
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