Former Honolulu Marsh exec violated pact
By Cynthia Cotts
Bloomberg News Service
NEW YORK — Former Marsh & McLennan Cos. executive Chad Karasaki violated his nonsolicitation agreement when, after being hired away last March by competitor Aon Corp. to run its Honolulu office, he launched an effort to lure away 23 Marsh clients, a federal judge in Manhattan ruled.
U.S. District Judge John Koeltl ordered Karaski, who ran Marsh's Hawai'i office before leaving for Aon, and his colleagues to stop approaching Marsh clients until Oct. 30. The judge directed Aon to pay Marsh's lost revenue and legal fees. Chicago-based Aon and New York-based Marsh are the two largest insurance brokers in the world.
Karasaki, in violation of his agreements, has participated in the direct and indirect solicitation of Marsh clients and employees and has openly violated his contractual agreements by working on that business at Aon, Koeltl wrote in his Oct. 30 decision.
The decision relieves Marsh from paying fees for what its lawyers described as more than six months of intensive, around-the-clock litigation in a statement on the Web site of New York-based law firm Weil, Gotshal & Manges. Weil attorney Gary Friedman referred questions to Marsh.
Marsh General Counsel James McNasby said today in an e-mailed statement that the company is pleased with the ruling and will continue to enforce its rights.
Aon said it will appeal.
Karasaki and his lawyer, Robin Tarr, declined to comment.
"We believe the ruling is erroneous and we intend to appeal," Aon spokesman David Prosperi said in an e-mailed statement. Karasaki is indemnified and continues to work as head of Aon Risk Service's Hawai'i office in Honolulu, according to Prosperi.
Karasaki began work at Marsh in 1986. From 2005 to 2008, he served as head of the Hawai'i office, according to the decision. He focused on construction insurance clients and was responsible for building client relationships, the judge wrote, representing about 30 clients and supervising some 36 employees.
Marsh paid Karasaki a six-figure salary, according to court papers, and between 2004 and 2008 he was paid cash bonuses of more than $410,000. He was given a budget of $91,000 in 2007, which he used to sponsor events and parties, and had a travel and expense budget of more than $34,000 between August 2007 and March 2008, according to the decision.
On March 10, Karasaki resigned to become head of Aon's Hawai'i office, the judge wrote. In 2007, the outpost had underperformed and Aon hoped that Karasaki would double or triple the size of its Hawai'i business, Koeltl found.
Karasaki recruited four Marsh employees. They began making "courtesy calls" to Karasaki's former Marsh clients, according to the decision. By his own admission, Karasaki had direct contact with nine former Marsh clients and indirect contact with 14 others.