INSURANCE COMPANIES FIGHT OVER NON-COMPETE
This report comes to our readers from Chicago.
CRC Insurance Services, Inc, describes itself as one of the leading wholesale insurance brokers in the nation, with 29 offices across the country. CRC is suing many of its former employees and Ryan Specialty Group, Inc., (also an insurance broker), for violations of its non-compete agreements.
A number of CRC employees, who had signed non-compete agreements, left CRC several months ago and took their services and talents to Ryan Speciality. As a result, CRC filed suit in federal court seeking restrain its former employees from being employed or associated with any entity in competition with CRC in the state of Illinois, and from soliciting CRC’s employees and customers for two years. The two year prohibition was set out in the departing employees’ non-compete agreements.
As in all such cases, the court was required to “balance the harm” to the respective parties in deciding whether to enjoin the ex-employees of CRC from working for Ryan Speciality. Judge James Zagel (U.S. District Court in Chicago) denied CRC’s request for a preliminary injunction, stating:
“While I acknowledge that a failure to issue this injunction will result in some continued harm to CRC, not only through loss of business, but also in the damaged morale of the remaining employees, this harm is outweighed by the significant harm to the 39 (former CRC employees) who would be enjoined from working for (Ryan Specialty) and largely preclude any possible employment in their chosen field, the damage to (RT Specialty) if forced to close its doors, and the harm to CRC’s former clients of not being able to choose their broker of choice.”
The case is far from over but Ryan Speciality won the first round!