Gallagher Sues Former Brokers for Alleged Client Solicitation and Confidentiality Breach

What's Happening?

Arthur J. Gallagher, a global insurance brokerage firm, has filed a lawsuit against two former employees, James Baranello and Joseph Siringo, who left the company to establish their own brokerage, Cornerstone Risk Advisors, in New York. The lawsuit, filed in federal court, accuses the former employees of violating non-solicitation and confidentiality agreements by allegedly soliciting Gallagher clients and using confidential information. Baranello and Siringo, who joined Gallagher in 2021, resigned in May 2025 without the required 30-day notice. Gallagher claims that before their resignation, the duo solicited a major client, representing 70% of their business at Gallagher, which subsequently moved to Cornerstone. Additionally, Gallagher alleges that other clients, including a plumbing company, an electric company, and a construction contracting firm, have also been diverted to Cornerstone, resulting in a loss of over $50,000 in recurring revenue.

Why It's Important?

This legal action underscores the challenges companies face in protecting their client base and proprietary information when employees leave to start competing businesses. For Gallagher, the lawsuit is crucial to safeguard its business interests and enforce employment agreements that prevent unfair competition. The outcome of this case could have significant implications for the insurance industry, particularly in how firms manage employee transitions and protect client relationships. If Gallagher succeeds, it may deter similar actions by employees in the future, reinforcing the importance of adhering to contractual obligations. Conversely, a ruling in favor of the former employees could encourage more professionals to venture into entrepreneurship, potentially reshaping competitive dynamics in the industry.

What's Next?

Gallagher is seeking both damages and injunctive relief to prevent further breaches of the agreements by Cornerstone and the former employees. The court's decision on these requests will be pivotal in determining the immediate business operations of Cornerstone and the legal precedents regarding non-solicitation and confidentiality agreements. The case may prompt other firms to review and possibly tighten their employment contracts to prevent similar situations. Additionally, the insurance industry will be closely monitoring the case for its potential impact on employee mobility and competition.