Wells Fargo Insurance Services USA, Inc., or WFIS, is suing Alliant Insurance Services, Inc., a company that submitted a failed bid to buy the Wells Fargo unit. WFIS claims that Alliant gained insider knowledge while bidding to buy the unit and is using it in an "aggressive campaign" to poach top sales executives for its own benefit -- and much to the detriment of WFIS.
WFIS is Wells Fargo & Co.'s commercial insurance unit. After the scandals of last year, the banking giant has decided to focus on its core business and is shedding the insurance unit, according to Reuters. USI Insurance Services submitted the successful bid in June and is expected to close on the deal later this year.
During the bidding, Alliant gained access to WFIS trade secrets including the names of the unit's top sales producers and details of their employment agreements. It was also able to see the names of WFIS's top 100 customers and the amount of revenue those customers generate.
In order to participate in the bidding, Alliant and others were required to sign non-disclosure and no-poaching agreements that specifically barred solicitation of WFIS employees for 18 months, according to the lawsuit.
Not only has Alliant breached that agreement, WFIS claims, but it has also hired a former WFIS executive vice president in June, whom WFIS believes is sharing confidential information with Alliant to help it target and solicit WFIS's top sales executives. Moreover, Alliant's chairman and chief executive may be directly participating in the poaching attempts.
The initial goal of WFIS's lawsuit is an injunction preventing Alliant from poaching any WFIS executives. It is also seeking disgorgement of any financial gains garnered from its recruitment of those executives and some unspecified damages.
Reuters reports that Alliant did not respond immediately for comment.