Category: My Data

James Mota was an exceptionally successful exclusive financial specialist (“EFS”), who primarily marketed and sold financial products including life insurance. From his Answer and Counterclaims, filed on 3-25-21, he acted quite appropriately in his exit from Allstate in the sense that he notified Allstate in advance of his exit, he found a successor and trained him to take care of his clients or accounts, and kept in touch with agents who had referred him business in the past by making known to them and the successor his continuous assistance to old clients. Allstate did not cite one case where he directed old customers to cancel Allstate policies. And yet Allstate sent him cease and desist letters on 7-9-20 and 10-19-20 and sued him for trade secret theft on 2-2-21. Judge Liman seemed to believe that Mota had acted honorably and decently.
During the period between 1-20-20 when Mota quitted his job with Allstate and 10-19-20 when Allstate filed the suit against him, Allstate “had continued to use Mota’s name and, as part of Allstate’s wrongful efforts to solicit business in Mota’s name, continued to falsely represent that Mota was affiliated with Allstate after he had left the company,” alleged Mota’s attorney, Mr. Ward. (Answer and Counterclaims, §53, p.17.) Judge Liman summarized the case in his 11-5-21 Opinion and Order and concluded, “Allstate’s motion to dismiss the first (unfair competition, Answer and Amended Counterclaims, §66-73) and second counterclaims (misappropriation of Mota’s name and image, Id., §74-85) is denied; the third counterclaim (bad faith claim under the defend trade secrets act, Id., §86-89) is dismissed.” In his 5-20-22 final Opinion and Order, he concluded, “Mota’s motion for partial summary judgment as to liability on his second (amended) counterclaim is GRANTED, and Allstate’s motion for summary judgment is DENIED.” A big victory to the defendant! Or to agents, who were constantly and routinely bullied by Allstate in this fashion? Judge Liman had handed agents a deadly weapon against the misuse of the no-compete covenant by Allstate.

It may be noted that the no-compete covenant signed by the EA of P&C is different from the restrictive no-compete covenant, signed by the EFS of financial products. The latter means that an EFS would not influence an policy holder of Allstate to cancel an existing policy, whereas the former forbids an ES to solicit business from his/her former customers for a period, usually, of one year.