Labor & Employment Law Daily Wrap Up, TRADE SECRETS—W.D. Wis.: Summary judgment and sanctions awarded against Allstate in trade secrets dispute, (Jan 9, 2026)

By Kevin M. Finson, J.D.

Attorney fees were awarded against Allstate because trade secrets and breach of confidentiality agreement claims it brought against a former employee lacked any legal or factual basis.

Allstate had committed sanctionable misconduct in bringing suit against a former salesperson for misappropriation of its confidential information, the U.S. District Court in Madison, Wisconsin, has held. The claims were based on unsupported suspicions of witnesses who admitted to lacking personal knowledge and were brought without a reasonable and competent inquiry (Allstate Insurance Company v. Freeman, No. 3:24-cv-00479-jdp (W.D. Wis. Jan. 7, 2026)).

Deanna Freeman was employed as an insurance agent for the Beaulieu Agency, LLC (Beaulieu), which sold insurance products on behalf of Allstate Insurance Company (Allstate). As a part of her employment, Freeman had access to Allstate’s database of customers and policies, and signed a confidentiality and non-competition agreement, as well as an agreement not to solicit Allstate customers or sell insurance products within a mile of the office where she sold Allstate products for a period of one year after the end of her employment. Freeman eventually resigned her position and began selling insurance products for a competitor. Freeman’s former employer alleged that she took handwritten notes and client information and induced their customers to cancel policies.

Allstate brought suit against Freeman for misappropriation of trade secrets, breach of contract, tortious interference, and for replevin. Freeman moved for summary judgment and for sanctions.

Trade secrets. Allstate alleged that Freeman wrongfully retained the customer information to which she had access as an employee. The court found that it was undisputed this access ended when Freeman resigned from Beaulieu, and Allstate admitted it had no evidence that Freeman downloaded, exported, or forwarded any of that information while she still had access. Allstate also argued that Freeman had used her cell phone to contact clients, so had their information on her phone, but this would be only names and phone numbers, not protectable trade secrets. Allstate also argued that Freeman took handwritten notes and printed documents in the course of her work, but there was no evidence of the contents of those notes or documents, or that she retained any of them after her resignation.

Breach of contract. Allstate alleged that Freeman breached her contractual obligations by disclosing Allstate’s confidential information, by soliciting Allstate’s customers, and by selling insurance from an office less than a mile from Beaulieu’s office.

The court found that the confidentiality agreement was unenforceable under Wisconsin law due to its lack of geographic or time limitations as to any information except that which would qualify as a trade secret, and it had already determined Allstate failed to show any trade secrets. As to solicitation, the court found that there was no evidence Freeman had initiated any contacts with Allstate’s customers, but only that they had reached out to her, and the court interpreted Wisconsin law as holding that this was not a solicitation. Finally, as to the office location, the evidence only showed that Freeman’s new employer had an office within a mile of Beaulieu’s office, not that Freeman had ever worked from that location.

Tortious interference. The court found that there was no evidence that Freeman used improper means to interfere with the contracts between Allstate and its clients because Allstate had failed to show misappropriation of trade secrets or violation of her non-solicitation and non-competition agreements.

Replevin. Allstate sought the return of its confidential information. The court found that Allstate had failed to produce evidence sufficient for a reasonable jury to find that Freeman possessed its confidential information.

Sanctions. Freeman sought sanctions on the ground that Allstate’s arguments as to each claim were legally and factually frivolous. With regard to the non-solicitation agreement, the court found that Allstate had at least an arguable basis for its claim because there was no controlling Wisconsin precedent on whether an employee violates a non-solicitation agreement by communicating with a former customer after that former customer initiates contact. Although the court had determined that Wisconsin law would not allow a claim under those circumstances, it was not unreasonable for Allstate to argue otherwise. As to the remaining claims which arose from allegations about the taking of confidential information, the court found that Allstate had relied entirely on the suspicions of the owners of Beaulieu, who admitted they lacked personal knowledge about the key facts. The court determined this was not a reasonable and competent inquiry.

The court granted Feeman’s motion for summary judgment as to all claims and granted her motion for sanctions as to the claims based on confidential information, but denied sanctions as to the claims based on the alleged violation of her non-solicitation agreement.

The case is No. 3:24-cv-00479-jdp.

Judge: Peterson, J.

Attorneys: J. Scott Humphrey (Benesch Friedlander Coplan & Aronoff LLP) for Allstate Insurance Co. Robert Bennett Corris (Robert B. Corris SC) for Deanna Freeman.

Cases: TradeSecrets ContractClaims StateLawClaims TortClaims RemediesDamages WisconsinNews