USI Insurance Services Inc. said in a lawsuit filed Friday in federal court in Charlotte, North Carolina, that two former employees breached their employment agreements by soliciting one of its clients and sharing confidential information.
The brokerage said in the complaint that Douglas Mitchell and Reed Schact exploited its goodwill and confidential information, causing more than $75,000 in damages.
The suit asserts claims for breach of contract and seeks injunctive relief barring Mr. Mitchell and Mr. Schact from soliciting clients and using its confidential information.
Mr. Mitchell started working for USI when the brokerage acquired his employer, ACO Brokerage Holdings Corp., in December 2017. He was ACO’s vice president at the time of the acquisition, court records show.
Following the acquisition, Mr. Mitchell accepted a position as a commercial lines producer for USI and signed a confidentiality, nonsolication and noninterference agreement that barred him from using or disclosing the brokerage’s confidential information for five years after his departure. The agreement prohibited him from attempting to do business with USI’s clients for two years and prospective clients for six months after his departure.
Mr. Schact joined USI in July 2022 as a commercial lines associate account representative and signed a similar employment agreement.
Mr. Mitchell left USI in late 2023 and started working as the president of U.S. Expansion Insurance Advisors, a consulting firm he founded that competes with USI.
Mr. Schact resigned from USI in February 2024 and started working as an insurance advisor for Lowry Insurance in March.
USI said Mr. Mitchell had communications with its client Ludo Fact USA about transferring the company’s business to Lowry after Mr. Schact started working for Lowry.
USI declined to comment on the filing.
Representatives for Mr. Mitchell and Mr. Schact were unavailable.
The case is USI Insurance Services LLC v. Douglas Mitchell et al.
