CHICAGO—CRC Insurance Services Inc. and Ryan Specialty Group Inc. will plead their cases Friday in front of a federal judge in Chicago over whether more than 35 former CRC employees can join the rival wholesaler.

CRC is seeking a preliminary injunction against the former employees; Chicago-based Ryan Specialty; its founder, Patrick G. Ryan; and its subsidiary, RT Specialty L.L.C.

Among other things, CRC is seeking to restrain its former employees, who resigned last month, 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, as stipulated in employees' respective employment contracts.

“If CRC's former employees are not enjoined from violating the noncompete, nonsolicitation and nonaccept provisions in their employment agreements and if RTS, RSG and (Mr.) Ryan are not enjoined from soliciting and accepting CRC's clients, CRC's very survival is in jeopardy,” CRC said in its motion.

More than 120 CRC employees in Chicago, Philadelphia and California have left CRC since May 4 to join RT Specialty, court papers say.

CRC turned to U.S. District Court in Chicago last week after an Alabama circuit court judge ruled May 28 that the court did not have jurisdiction over Ryan Specialty, Mr. Ryan and RT Specialty because the alleged wrongdoing did not occur in Alabama, where CRC is based.

However, the Alabama judge ruled that the court does have jurisdiction over Ed McCormack, who also was named in CRC's suit. Mr. McCormack is a Chicago-based attorney who worked for CRC on several matters while in private practice before joining Ryan Specialty as a managing director this year. CRC contends that after obtaining knowledge of CRC's business operations, Mr. McCormack breached his fiduciary duty by going to work for Ryan Specialty and assisting in efforts to hire CRC's employees.

In an e-mail, CRC Chairman and CEO Tom Curtin said the Birmingham, Ala.-based wholesaler will continue to pursue litigation against Mr. McCormack in Alabama and is appealing the court's jurisdictional decision regarding Ryan Specialty, Mr. Ryan and RT Specialty.

CRC also is “vigorously defending” the suit filed against it on May 4 by 22 former CRC employees in Cook County Circuit Court in Chicago, Mr. Curtin said. The departing employees are seeking a declaration that restrictions in their employment agreements are unlawful and contrary to public policy.

In regards to the hearing this week, Mr. Curtin said: “CRC looks forward to sharing all of the facts with the court at this hearing and trusts that in the interim the former CRC employees will abide by their employment agreements.”

Ryan Specialty Group said it also looks forward to presenting its case to the judge.

In an interview, Mr. Ryan said he's always felt that “it's wrong” to bind people by broad noncompete agreement and preclude them from working in the industry that they want to work. “I've always felt that if people want to leave, they should be able to leave,” he said.

Despite reports that he and his firm “raided” CRC, Mr. Ryan said that wasn't the case.

“The reality is, many of the senior (CRC) people in leadership positions were looking to leave,” Mr. Ryan said. “They wanted to leave BB&T (Corp.), which owns CRC, because they said they had problems being owned by a large bank that also owns a large retail broker,” he said. “Independence for wholesalers who are part of an organization that has retail brokerage business is a big thing...because they are competing with their clients.”

“We're not targeting CRC in any way,” Mr. Ryan said. “We're hiring people from all different backgrounds...and building our business in a broad way.”

RT Specialty's Chicago office opened its doors for business June 4 as the 30-day notice of resignation period of the former CRC employees expired. RT Specialty also has offices in California and Philadelphia, staffed with former CRC employees.

“Despite the recent departures from CRC to RT Specialty, CRC remains focused on its clients. We are grateful for their loyalty and dedicated to continuing to provide the same excellent service clients have come to expect from CRC,” Mr. Curtin said in the e-mail.