PNC Financial Services Group Inc. is butting heads in court with its newest competitor: a small investment and trust company founded by a group including two former employees.

The $65-billion asset Pittsburgh banking company and its subsidiary PNC Bank sued Glenview Trust Co. of Louisville, Ky., on April 4, alleging that former PNC employees conducted "a covert conspiracy" to form Glenview and harm PNC's business. The plaintiffs also claim that Ronald J. Murphy, a former executive at PNC Advisors in Louisville and one of five founders of Glenview, violated a nonsolicitation agreement and that six other former employees violated PNC's code of ethics.

The six, who had worked in PNC Advisors' Louisville office, schemed "to divert PNC's employees, divert PNC's corporate opportunities" and to "misappropriate PNC's confidential and proprietary business information," the complaint stated.

Glenview's attorney, Samuel D. Hinkle 4th of Louisville-based Stoll Keenon & Park, said the company and its 10 to 15 employees "absolutely deny all charges and allegations." He said the lawsuit is damaging business at Glenview, which was opened April 2. In response, the trust company has countersued, alleging that PNC intentionally interfered with its ability to attract customers and new employees.

Glenview won the first round of the legal battle two weeks ago when a Kentucky court denied PNC's request for a temporary injunction and restraining order to prevent Glenview from approaching PNC's customers and employees.

"PNC cannot stop legitimate, free competition," a Jefferson Circuit Court judge said. "There is no evidence, only mere speculation, that defendants have or might use PNC confidential information to obtain PNC clients."

PNC continues to demand the return of its property, any misappropriated confidential information and trade secrets, any business opportunities developed at PNC, and the employees' salaries during their alleged period of disloyalty. It is also demanding compensation for losses allegedly caused by the defections, as well as punitive damages.

The lawsuit was triggered by the collective resignation of the six PNC employees on March 19, four days after the expiration of Mr. Murphy's nonsolicitation agreement. Before he retired in March 2000, Mr. Murphy had signed the 12-month agreement with PNC in exchange for about $500,000, including $155,000 he would have to repay PNC if he breached its terms. The six PNC employees began working at Glenview in April. David Grissom, who left PNC about three years ago, is part of the founders group.

The plaintiff claims that the six were involved in planning the start-up of Glenview for at least their last six months at PNC. This assertion is partly based on notes found in the desk of one former employee describing the alleged "conspiracy to form Glenview Trust as well as plans to solicit existing PNC employees and customers," according to the complaint.

During the injunction hearing this employee, Tawana L. Edwards, said she had prior, secondhand information about a possible job at Glenview but that Mr. Murphy had not contacted her about the post until March 16, the day after his nonsolicitation agreement expired.

Michael N. Harreld, PNC's regional president, acknowledged at the hearing that he is unaware of any tangible confidential information taken by the six employees or of any PNC customer switching to Glenview Trust. He testified to the possible solicitation by Mr. Murphy of one PNC customer.

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