Liberty Mutual has filed suit against the former lead sales representative in its Wappingers Falls office, claiming that she conspired with an insurance broker to misappropriate confidential information before and after she took a job with the competitor.
Liberty sued Michelle Paolicelli of Poughkeepsie and her new employer, Brinckerhoff and Neuville insurance agency, March 18 in federal court, White Plains.
Relationships with policyholders and prospective customers “are the lifeblood of Liberty Mutual’s business,” the insurer says, but Paolicelli persuaded clients to replace Liberty policies with B&N policies.
B&N president Stephen Pogge, a former Liberty employee, did not respond to an email request for comment. In January, B&N told Liberty that “any concern you have, if any, would be with Michelle Paolicelli and not with our office,” according to a letter submitted with the lawsuit. “We are unaware of any activity that would be in violation of the agreement you have with Michelle Paolicelli.”
Paolicelli declined to comment. Attorney Rebecca A. Valk acknowledged to Liberty in January that Paolicelli had periodically emailed Liberty documents to her personal email account for use while working at home, according to a letter she wrote to Liberty, but her client “asserts that she has not shared any of the information with any person.”
Boston-based Liberty Mutual, a $39 billion insurance giant, hired Paolicelli in 2010. It was her first insurance job, Liberty says in the complaint, further claiming that it trained her and helped her get licenses. In 2014, she was promoted to lead sales rep.
In this position she had access to Liberty’s most valuable information, including confidential details about policyholders and prospective customers, the lawsuit states.
“Liberty Mutual has become a market leader based in part on its confidential information,” the complaint notes.
Sales reps are required to sign confidentiality agreements and to attend ethics training courses annually. They may not refer customers to other insurance agencies, for instance, or send the company’s “non-public information” to their personal email accounts or devices.
Last year, Paolicelli connected to Liberty’s computer system without permission while she was on maternity leave, the company alleges. Liberty says it asked her to stop, and when she kept using the system, it blocked her access.
She resigned within days, on Sept. 21, the complaint says, and immediately went to work for B&N as an insurance agent in its Fishkill office.
Liberty says it discovered that Paolicelli had been giving its confidential information to B&N for months before she resigned and had presented her clients with proposals prepared by B&N.
Three days before she resigned, she allegedly sent six emails from her Liberty account to her personal account, including 145 documents with personal information for nearly 100 policyholders and prospective customers.
After she resigned, Liberty claims, B&N submitted more than 20 cancellation notices from policyholders seeking to switch policies. The notices were from people whose information Paolicelli had emailed to her personal account, and her handwriting was allegedly on some of the forms.
Liberty accuses Paolicelli of computer fraud, breach of fiduciary duty and breach of contract; B&N of aiding and abetting breach of fiduciary duty; and both defendants of violation of a trade secrets law, tortious interference, unjust enrichment and civil conspiracy.
It seeks unspecified damages and an order directing them to cease and desist from selling products to Paolicelli’s former policyholders and prospective customers, for two years, and from helping Liberty policyholders to cancel policies.
“If sales representatives, like Paolicelli, are permitted to ignore their contractual obligations with impunity,” the complaint says, other employees “will feel emboldened to act similarly.”