Delaware Chancery holds off on Marsh's TRO request against Howden, defers to New York

By Isha Marathe

Aug 20 - (The Insurer) - A Delaware vice chancellor said on Tuesday that Marsh's request for a temporary restraining order against Howden for the alleged poaching of over 140 Florida zone employees would be suspended until the Southern District of New York holds its scheduled hearing in an earlier-filed lawsuit.

Both Howden and Marsh declined to comment.

Howden first sued in New York's Supreme Court on July 27, challenging the restrictive covenants of employees who left Marsh and moved to Howden.

The hearing, anticipated on September 4, is related to a July 29 lawsuit Marsh filed against four of its former Florida executives, alleging they executed a "scheme" to "poach" more than 100 of its staff, and at least eight major clients, for London-based Howden, which is building its U.S. presence.

The broker asked the SDNY for a preliminary injunction, a TRO and expedition and did not name Howden as a defendant, only its former employees.

Marsh sued Howden in the Delaware Chancery Court on August 1, alleging conspiracy to lift out its Florida zone staff and requesting a TRO to prevent former Marsh employees and Howden from servicing Marsh clients, or using Marsh information.

Howden responded with a proposed schedule including an expedited motion to dismiss.

The Delaware vice chancellor, Judge Morgan Zurn, said in Tuesday's ruling memo that Marsh neglected to disclose the two ongoing New York suits while filing its case with the Chancery.

As such, Zurn granted Howden's expedition to the motion to dismiss the TRO, but held Marsh's motion for a TRO in abeyance, ruling that the New York federal judge will go first in the multicourt battle.

"Marsh came to this Court and sought expedition and injunctive relief without advising this Court that it risked unwittingly stepping on two other courts’ toes, in violation of principles of comity, judicial efficiency, and the avoidance of inconsistent rulings," Zurn wrote.

"And Howden is of course a party in its action, and asked SDNY to be a party there; this is not a circumstance in which only this Court has jurisdiction over Howden."

The upcoming September 4 hearing in SDNY will consider Marsh's allegations against its former employees and the TRO filed. Additionally, the court has asked Marsh to show cause as to why Howden should not be permitted to intervene in that case and why SDNY should not abstain from hearing the case in favor of the New York state action that followed.