In an opinion Monday, Judge Abrams granted, in part, a motion by one insurance brokerage, Marsh & McLennan (referred to as MMA), to preliminarily enjoin a rival, Alliant, and certain employees that had left to join Alliant, from poaching clients, in violation of certain contractual non-solicitation obligations.

Judge Abrams enjoined further poaching but would not go so far as to enjoin Alliant from servicing clients that had already left because there was no “indication that MMA’s lost clients would return” if an injunction issued and because, even if MMA were to ultimately prove the client defections resulted from contractual breaches or tortious behavior, the appropriate remedy would be damages (even potentially punitive damages), not a preliminary injunction:

MMA has emphasized that Alliant has engaged in a pattern of tortious interference with MMA: moving clients over quickly, before MMA (or other rival insurers) even have a chance to file for an injunction. . . .  But this alone is not the basis for injunctive relief. There are other mechanisms by which the judicial system deters egregious conduct . . . . For instance, …“an injured party can recover punitive damages when the tortious act complained of involved a wanton or reckless disregard of the plaintiff’s rights.”

MMA is understandably concerned with “stop[ping]” the “tide” of lost . . . clients.  This Order—which prevents Alliant from soliciting or accepting more of … MMA clients—should stop that tide.

At oral argument, MMA’s counsel . . .  argu[ed] that . . . to allow Alliant to continue to reap the improperly gotten gains of lost clients would create a “major loophole” in the agreements and “reward” tortious conduct. While that may be true, an injunction is not the proper legal tool to deter such tortious conduct.