Labor & Employment Law Daily Wrap Up, TRADE SECRETS—N.D. Ill.: Insurer wins some trade secret claims, awarded just $2, (Aug 28, 2026)

By Jonathan Anderson

The court was highly critical of the plaintiff’s damages model, which the court said had multiple inconsistencies and errors.

An insurance company that accused competitors of poaching agents and stealing client data won a partial victory in a new ruling by the U.S. District Court for the Northern District of Illinois, Western Division. The plaintiff won some claims against certain defendants alleging breach of contract and misappropriation of trade secrets. However, the court entered judgment in favor of defendants on a claim of tortious interference, and the court awarded the plaintiff damages of only $2. The court wrote that the plaintiff did not show it is entitled to damages, and further that the plaintiff’s damages model suffered from multiple inconsistencies and errors (Bankers Life and Casualty Co. v. American Senior Benefits, L.L.C., No. 3:22-cv-50009 (N.D. Ill. Aug. 24, 2026)).

Background. Plaintiff, Bankers Life and Casualty Company, sells insurance policies to customers through its own agents. Defendant American Senior Benefits, LLC (ASB), sells insurance products from third party companies through a network of agents, including some agents who are affiliated with other firms that provide additional resources, including defendants Integrity Marketing Group, Key Retirement Solutions, Inc., and Heartland Retirement Group. Bankers Life alleges that defendants were complicit in the theft of trade secrets, namely confidential client lists, when Bankers Life agents switched employers to the various defendants.

In 2018, Bankers Life and ASB sought to end earlier litigation by entering into a settlement agreement, including a provision the parties refer to as “the Protocol,” which imposed several requirements related to ASB’s recruitment of former Bankers Life agents.

After the court denied defendants’ motions for summary judgment, the court heard testimony and argument in a bench trial in March and April 2026. The court subsequently issued its findings of fact and conclusions of law.

Breach of contract. First, the court concluded that plaintiff has shown, by a preponderance of the evidence, that ASB breached the Protocol. The court wrote that ASB’s arguments to sidestep liability for its breaches of the Protocol were not persuasive.

Misappropriation of trade secrets. Second, the court concluded that plaintiff has shown, by a preponderance of the evidence, that Bankers Life’s trade secrets were misappropriated by agents, and that Key ratified that misappropriation and incurred liability under the federal Defend Trade Secrets Act (DTSA) and the Illinois Trade Secrets Act (ITSA). On counts I and II, the court entered judgment against Key, and in favor of all other defendants.

Defendants argued that Bankers Life’s client and lead lists are not secret because they can be purchased at low cost from third-party vendors. However, the court cited multiple witnesses who testified that such lists include sensitive compilations of other non-public information, such as consumer “financial goals, precise income, investments, existing insurance coverage, risk tolerance measures, product preferences, family priorities, personal aspirations, detailed medical conditions, attorney/accountant contacts, and other nuanced information.”

The court concluded that one defendant, Key, is vicariously liable for agents’ misappropriation of trade secrets. The court wrote that Key’s leader knew that several agents within his downline had misappropriated trade secrets when they came over from Bankers Life, and that this individual took no action against these agents and actively chose to continue benefiting from the agents’ misconduct.

However, with respect to ASB, the court said there is not enough evidence to conclude that ASB had the “right to control” its agents’ conduct, namely that ASB’s relationships with its agents were close enough to justify a finding of actual authority. The court further said that plaintiff failed to show that ASB ratified agent actions. The court similarly found no basis for vicarious liability against Heartland and Integrity, citing a lack of evidence of a principal-agent relationship with ASB agents or that they ratified defendants’ conduct.

Tortious interference. Third, the court concluded that plaintiff did not show, by a preponderance of the evidence, that defendants tortiously interfered with their contractual relations. The court entered judgment in favor of defendants on Count IV.

Although there is some evidence that defendants knew agents were violating their covenants with Bankers Life, the court wrote that there is not enough evidence to conclude that defendants “intentionally interfered” with those contracts by encouraging agents to violate them.

Damages. The court concluded that plaintiff has not shown it is entitled to damages. The court reasoned that plaintiff’s damages expert was impeached at trial, with a damages model that was found to have multiple inconsistencies and errors. Further, the court said that plaintiff’s damages model makes no effort to trace the damages to particular breaches of the Protocol.

The court wrote that it is reasonably certain that Bankers Life suffered some financial harm because of ASB’s violation of the Protocol and Key’s misappropriation of trade secrets, and that a liability verdict in favor of Bankers Life is appropriate. However, given the defects in plaintiff’s damages model, the court said Bankers Life has not shown it is entitled to anything beyond nominal damages. The court thus awarded damages of $1 in favor of Bankers Life from both ASB and Key, for a total of $2.

The Case is No. 3:22-cv-50009.

Judge: Pallmeyer, R.

Attorneys: Adam Douglas Cotter (S.K. Huffer & Associates, PC) for Bankers Life and Casualty Co. Michael P. Lynn (Lynn Tillotson Pinker & Cox, LLP) for American Senior Benefits, LLC.

Companies: Bankers Life and Casualty Co.; American Senior Benefits, LLC

Cases: TradeSecrets ContractClaims TortClaims RemediesDamages IllinoisNews