NFP and Alliant end dispute over real estate practice hires

By Michael Loney

Feb 4 - (The Insurer) - NFP and Alliant have ended a legal dispute over the latter’s hire of 19 employees from Aon-owned NFP’s real estate practice, including its leader Gary Pestana.

The two broking firms on 27 January filed a stipulation to dismiss litigation in the Central District of California.

The following day Judge Michelle Williams dismissed the case with prejudice including as to all claims and counterclaims asserted by the parties against each other, with each of the parties bearing its own costs and attorneys’ fees.

As this publication previously reported, NFP sued Alliant in April last year alleging it orchestrated a raid of 19 employees from its real estate practice.

The lawsuit claimed the individuals breached their contractual obligations, and stated that NFP had already incurred over $2mn in damages from losing five clients.

The litigation came after The Insurer revealed in March last year that Alliant had raided its mid-market broking rival NFP for a real estate broking team led by Pestana that included Tim Edwards, Ramy Morcos and Margot Spera.

“In the past few years, Alliant has become synonymous with unfair competition,” the lawsuit stated, noting numerous lawsuits that competitors have filed against Alliant based on similar allegations.

The lawsuit added: “Alliant follows a carefully scripted playbook: it orchestrates a raid of a competitor’s workforce that includes directing employees to resign without notice at the same time, inducing the departing employees to breach their contractual and fiduciary obligations to the competitor, and immediately attempting to steal the competitor’s clients and business through improper means.

“NFP is Alliant’s latest target, and Alliant’s wrongful motives are laid bare by its deceptive hiring practices.”

The lawsuit alleged that before they resigned from NFP some of the individuals “were already advancing Alliant’s scheme by taking actions to transfer NFP clients’ business to Alliant, in violation of their contractual obligations and fiduciary duties to NFP”.

Alliant in May filed a counterclaim in the dispute.

The counterclaim centred on the contention that the agreements Pestana, Morcos and other NFP employees signed are void and unenforceable.

Alliant in the filing also suggested that when NFP announced in December 2023 that it was being acquired by Aon, “several NFP employees [began] to rethink their relationship with NFP, and future relationship with Aon, and to seek new employment opportunities elsewhere”.

Alliant stated in the filing that in March 2024, Pestana and three other members of the NFP real estate practice “each independently resigned from their employment with NFP and accepted employment with Alliant”, with 15 others accepting jobs with Alliant in the following weeks.

The judge in October last year denied both Alliant’s and NFP’s motions to dismiss the claims against them.

Then in November last year Alliant filed an amended counterclaim as well as an answer to NFP’s complaint.

Alliant argued that the restrictive covenants contained in NFP’s agreements with California employees broadly seek to stifle competition through a series of interlocking restrictive covenants that are “unlawful both individually and collectively”.

“As a California employer seeking to fairly compete, Alliant is entitled to hire NFP’s California employees should they wish to pursue alternative employment and to take full advantage of their services,” the amended counterclaim said.

Alliant also stated that it has incurred attorneys’ fees and other costs to support its new California employees as a result of the unlawful restrictive covenant agreements used by NFP.

NFP declined to comment. Alliant had not responded to a request for comment by the time of publication.