PNC Financial Services Group Inc. sued a former executive and Morgan Stanley Inc. in Pennsylvania federal court Friday, alleging the ex-senior vice president conspired with the rival company to poach PNC workers, customers and trade secrets to unfairly compete, in breach of her employment agreement.
Pittsburgh-based PNC said Eileen Daly and Morgan Stanley schemed to coax other PNC employees to defect to Morgan Stanley, misappropriate its confidential business information and trade secrets, and unlawfully solicit its customers.
“PNC has suffered, and will continue to suffer, millions of dollars in damages, as well as the loss of customer relationships, customer goodwill and confidential business information,” the financial services corporation said in its complaint.
Daly is bound by employment and confidentiality agreements, PNC argues, which bar her from disclosing PNC’s sensitive business information or soliciting or doing business with current or former PNC customers and employees.
In spite of these agreements, Daly conspired with three other PNC employees, with the assistance of Morgan Stanley, to resign from PNC en masse, misappropriate PNC’s confidential information and divert PNC customers to Morgan Stanley, the suit says.
Days before her resignation, Daly tried to download confidential information concerning PNC’s customers, including confidential customer lists, but was blocked by internal security measures, PNC said.
Undeterred, Daly was seen taking photographs of her computer screen with her cellphone mere hours before her resignation, and PNC believes she also took 10 boxes of customer files from her office and is utilizing them to compete with PNC through Morgan Stanley, according to the suit.
Immediately following her resignation, Daly and other Morgan Stanley employees began contacting PNC customers using contact information only available by accessing PNC’s confidential information, including these customers’ private phone numbers, PNC claims.
“To date, Daly has succeeded in wrongfully transferring almost $250 million of customer assets, representing more than $1 million in annual fees for PNC, to Morgan Stanley,” the complaint states.
Morgan Stanley and Daly have also defamed PNC by using its highly confidential and proprietary information to make disparaging statements to current PNC customers regarding PNC’s fee structures and strategies, all for the purpose of convincing those customers to shift their business to Morgan Stanley, according to the suit.
Morgan Stanley did not immediately respond to a request for comment late Friday.
PNC is alleging breach of fiduciary and common law duties, breach of contract, tortious interference with contractual relations, misappropriation of trade secrets, conversion of corporate assets, commercial defamation, unfair competition and civil conspiracy.
Friday’s is at least the second trade secrets suit involving Morgan Stanley brought in the past several months. In October, Societe Generale SA sued a former commodities strategist and his wife, seeking to stop disclosure of trade secrets after the strategist emailed confidential and proprietary information to his wife in the months leading up to his taking a job with Morgan Stanley.
PNC is represented by Matthew F. Burger and Jordan M. Webster of Buchanan Ingersoll & Rooney PC.