loanDepot Is Suing Movement Mortgage In Delaware Federal Court For Poaching Loan Officers

loanDepot is suing Movement Mortgage In Federal Court. The company is accusing competitor Movement Mortgage of damaging its business by poaching it’s employees. The company alleges Movement Mortgage poached over 25 employees in three months. Thus, loanDepot found itself “effectively crippling” with “now-depleted” branches.

The lender filed the poaching lawsuit on June 22, 2023 in federal district court in Delaware. loanDepot states that Movement recruited and hired its employees in late 2021 and early 2022. The company alleges Movement Mortgage encouraged loanDepot employees took trade secrets and confidential information. The lawsuit also accuses Movement of inducing these employees to breach contracts by soliciting others to leave loanDepot. 

A Movement representative did not return a request for comments. 

loanDepot claims employees in Virginia, Pennsylvania, and Florida left the company to join Movement after an “orchestrated” move. They also claim Movement enticed these employees with “all-expenses-paid recruiting trips,” including to Movement’s headquarters in South Carolina. 

The lawsuit also alleges Movement offered a $125,000 signing bonus to loanDepot LOs to come to the company.

Did Movement Mortgage Steal loanDepot’s Trade Secrets?

The lawsuit alleges:

“In the weeks leading to their departures, the former employees accessed and misappropriated confidential and trade secret documents about loanDepot’s business, its employees, and its clients; information that, in the hands of Movement, was used to convert customers to Movement and away from loanDepot.”

loanDepot is also engaged in continuing arbitration with a number of its former employees. 

The lender is seeking damages and permanent injunctive relief against Movement for misappropriation of trade secrets. It is also trying to hold branches accountable for aiding and abetting breaches of fiduciary duty and unfair competition. In addition, loanDepot is seeking damages for unfair trade practices and tortious interference.

Since April 2022, the company filed three lawsuits against CrossCountry Mortgage in New York, California and Illinois. 

In early June, a judge in the N.Y. case ruled in favor of loanDepot in a preliminary injunction by prohibiting CrossCountry and employees who switched companies from using data they obtained from their prior employer. 

This Article Originally Appeared On LenderMeltdown.com

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