Court papers have been filed accusing Hyperion of co-ordinating the resignation of 47 employees to either pick up clients or force a sale of certain JLT Specialty divisions
Marsh has accused fellow broker Hyperion of a staff-poaching conspiracy after losing 47 employees from its recently acquired JLT Specialty business within a three-week period.
A minimum of £10m is being sought through the legal action. Court filings allege Hyperion co-ordinated the resignations between 23 April and 13 May this year, with a view to either taking clients or devaluing parts of the business to leverage a sale.
The resignations affected JLT Specialty’s real estate division (20 resignations, including 11 out of 17 members of the division’s executive committee), financial lines division (21 resignations), and special risks and programmes division (six resignations).
Among those leaving included the chief executive of real estate, the deputy business unit head of real estate, the global specialty head of financial lines, the chief executive of financial lines and the chief executive of special risks and programmes.
‘Co-ordinated plan’
Marsh alleges Hyperion wanted to acquire established teams and follow it up by buying the business itself.
Marsh claims the deputy business unit head of the real estate division said in an interview shortly after resigning that Hyperion chief executive David Howden “would be happy to talk to Marsh about buying the real estate book of business”.
The documents claim that the co-ordinated resignations were deliberately hidden from Marsh to prevent Hyperion’s recruitment plan from being frustrated.
In its evidence of a conspiracy, the legal papers allege chief executive of the real estate division, Nigel Todd, knew about the planned resignations from his division, but chose not to tell chief executive of Marsh JLT Specialty UK, Paul Moody.
Contract breaches
The papers detail a range of ways in which senior managers allegedly breached their contractual and fiduciary duties, and, based on interviews with those leaving, accuses Hyperion of compensating those staff members for any breaches.
Among the breaches, it is claimed the employees took steps to obtain confidential information to share with Hyperion, including details of structure, salaries, bonus awards and performance information.
It further states the resignations were specifically timed for after various employees had been paid retention bonuses.
The documents allege Hyperion planned “to proceed in this manner in the hope and expectation that they could acquire all or part of the business of the relevant divisions such that the reward to be made from their wrongdoing would far exceed any recompense that they may be ordered to pay by the courts”.
The legal papers allege various secret meetings were held with the senior JLT Specialty managers, and that they subsequently helped to encourage and co-ordinate the resignations.
The alleged plan is said to have intentionally harmed the JLT Specialty business. The filing details financial losses as coming in the loss of profits, time wasted investigating the resignations, retention payments, and the cost of hiring replacements.
Hyperion response
Hyperion has denied any wrongdoing.
A spokesperson for Hyperion said: “We are proud that Hyperion is a desirable company to work for and we see ourselves as a natural home for industry entrepreneurs who can thrive in an independent business.
“Equally, we are mindful to operate appropriately when hiring employees, we do not believe there is merit to these allegations and will be defending the claims robustly.”
The legal proceedings were filed on 15 May, two days after the last of the resignations, and it is stated in the papers that investigations are ongoing into the resignations, with aspects of the alleged wrongdoing currently inferential.
A spokesperson for Marsh said: “Marsh & McLennan is vigilant in protecting its business interests and will take appropriate legal action in order to do so.”
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