A captive insurance agency carrier accused a former agent of taking confidential information with her when she resigned. They sued her for violating her non-piracy agreement, among other charges.
The agent started working for a Wisconsin agency in 2010. At that time, she signed a confidentiality and non-competition agreement in which she promised not to disclose customer or policy information to third parties or to use that information to benefit herself. The agreement also prohibited her, for one year following the end of her employment, from soliciting the carrier’s customers or from operating at a location within a mile from the agency’s office.
While she worked at the agency, she sometimes used a personal cell phone to communicate with clients. The agency owners did not like this but did not order her to stop. She also took handwritten notes on phone conversations with clients. While she later stated that she shredded the notes, the owners claimed she often took them home with her.
She resigned from the agency in July 2023. The owners thought she was retiring from the business; she claimed she told them only that she was done being a captive agent for that carrier. She cleaned out her office and told the owners she had deleted all client contact information from her phone other than that for personal friends and family. The owners did not require her to give up her cell phone number. Later, they said they would have required her to give it up if they’d known she planned to keep working in the insurance industry.
Not long after, she became a partner at an independent agency that represented one of her former carrier’s competitors. Using her personal Facebook account, she advertised her services with the new agency. She did not contact any former clients, but some saw her Facebook posts and contacted her. When they did, she responded with her new contact information and offered to give them insurance quotes. Subsequently, 35 of her former clients switched to her new agency.
Her old agency’s owners noticed a suspicious number of mid-term policy cancellations from clients in the area where their former agent operated. They suspected that cancellation request forms were in that agent’s handwriting, though the forms left the identity of the new agent blank. The agent admitted to completing these forms. Some cancellations were requested by calling an after-hours hotline to avoid speaking with anyone. The agent had told those clients that this was an option. Other clients got defensive when asked why they were cancelling.
The owners suspected her of breaking her non-piracy agreement, using confidential information to solicit former clients, and “sneaking around” to avoid detection. The carrier subsequently sued her for allegedly stealing trade secrets, breaching her contract, interfering with their contract with her old agency, and to demand the return of the information she possessed.
The agent asked the court for summary judgment, which was a ruling in her favor based on the law when the facts were undisputed. She also asked the court to penalize the carrier for filing a frivolous lawsuit.
In January 2026, the judge granted most of her request. He found that she could have targeted her former clients using only publicly available information. Also, he noted, only 35 clients switched and most of them were her family members and friends. He found nothing unusual about an insurance agent working from home or cleaning out her office before resigning, though the carrier claimed this was suspicious behavior. The carrier, he said, had not shown evidence that she stole trade secrets, violated her contract, or kept confidential records.
Lastly, he ruled that most of the carrier’s claims were frivolous. Based on that, he ordered the carrier to pay her attorneys’ fees.
This carrier’s lawsuit was based on little more than the agency owners’ suspicions. That was not enough for them to succeed. Indeed, the judge penalized them for bringing an action on such flimsy grounds. If a carrier or an agency is going to pursue an action against a former producer, it will need much more evidence than this one had.
