Help

BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Wholesaler CRC loses 100 employees to Ryan Specialty

Reprints

CHICAGO—Patrick G. Ryan’s new wholesale group, Ryan Specialty Group, is attempting to hire about 100 employees away from CRC Insurance Services Inc., the nation’s largest insurance wholesaler.

Both firms have filed lawsuits against each other in state courts over the departing employees’ employment contracts.

In a statement on Thursday, Tom Curtin, CEO and founder of Birmingham, Ala.-based CRC, said, “In response to the recent departure of approximately 100 employees, including brokers and staff, we are reorganizing and appropriately restaffing.”

The wholesaler will not close any offices or exit any markets, he said. In an earlier e-mail to “valued business partners,” Mr. Curtin said the departing staff resigned Tuesday and worked in offices in Illinois, California and Pennsylvania.

In the statement, Mr. Curtin said many of the departing staff “have continuing obligations to CRC.” He added, “CRC's counsel is closely monitoring and evaluating the situation to ensure that CRC and its clients are protected.”

Former CRC President Timothy W. Turner joined Ryan Specialty in February as a managing director.

Mr. Turner and CRC are currently in litigation in California over various restrictive covenants contained in Mr. Turner’s CRC employment agreement. Mr. Turner, who originally filed suit against CRC in Los Angeles Superior Court, is seeking a declaration that the restrictive covenants are unenforceable. CRC, which sought to have the case moved to federal court, is seeking to have the suit dismissed on the grounds that there is no “actual dispute” between the two parties.

Meanwhile, 22 former CRC of Illinois employees filed suit Tuesday against CRC in state court in Chicago seeking a declaration that certain restrictive covenants in their respective employment agreements “constitute a significant overreaching on the part of CRC, and accordingly are unlawful and contrary to public policy.”

If enforced, the plaintiffs say they would be barred from working in the wholesale business anywhere in the country for the next two years.

According to the complaint, the employees want to leave CRC for R-T Specialty L.L.C., a new Chicago-based wholesale unit formed by Ryan Specialty Group, but CRC is seeking to prevent them from accepting the offers.

The suit goes on to say the former CRC employees wish to leave the wholesaler because it and its parent, BB&T Corp., have “for the past several years, embarked on a business plan that creates direct conflicts of interest between CRC’s retail insurance broker clients and BB&T’s own retail insurance brokers.”

Meanwhile, CRC on Wednesday filed a motion in circuit court in Alabama against Ed McCormack—former outside counsel to CRC who is now a managing director for Ryan Specialty—as well as Ryan Specialty, Mr. Ryan and R-T Specialty, seeking a temporary restraining order and preliminary injunction.

CRC accuses the defendants of “deliberately” causing dozens of CRC employees and brokers to agree to violate their non-solicitation and non-competition agreements, and causing CRC “irreparable injury.”

According to court papers, most of the CRC employees are working out their 30 day notice period and an injunction would maintain their “status quo” pending expedited discovery and an injunction hearing.

Separately, CRC filed suit against the same four defendants in the same circuit court accusing them of breach of fiduciary duty, intentional interference with contracts, unjust enrichment and conspiracy.

“We do not comment on legal matters,” Mr. Curtin said in an e-mail.

A Ryan Specialty spokesperson also declined to comment on pending litigation.

Mr. Ryan, founder and former chairman and CEO of Aon Corp., launched Ryan Specialty in February as a holding company of managing general underwriters, managing general agencies and brokers.

CRC is the largest wholesale brokerage in the United States with more than 1,100 employees, according to Business Insurance’s latest ranking. According to CRC, the wholesaler’s 2009 premium volume was more than $2.4 billion.