A representative for the movement did not respond to a request for comments.
A spokesperson for LendingDepo said, “Inducing individuals to violate contractual restrictions against employee solicitation and misuse of confidential information to steal business and customer relationships crosses the line of unfair competition, and we will protect our interests.” Will continue to vigorously defend.”
The California-based lender claims employees in Virginia, Pennsylvania and Florida left the company to join the movement in an “orchestrated” move and after “all-expenses-paid recruiting visits,” including to the movement’s headquarters in South Carolina. Additional Maryland, Washington, D.C. and Delaware employees also transitioned to the retail competitor.
The lawsuit claims that in some cases, the Movement offered $125,000 signing bonuses to LoanDepo loan originators to come to the company.
The lawsuit states, “To date, several LoanDepot branches have been effectively destroyed and LoanDepots have lost at least 25 employees as a result of the Movement’s violent raids.”
The lawsuit reads: “In the weeks prior to their departure, the former employees accessed and misused confidential and trade secret documents regarding LoanDepo’s business, its employees, and its customers; That information, which was in Movement’s hands, was used to convert customers into Movement and away from Loan Depot.”
Londepot is in an ongoing arbitration with certain former employees.
The lender seeks damages and permanent injunctive relief against Movement for misappropriation of trade secrets, aiding and abetting breaches of fiduciary duty, unfair competition, unjust enrichment, unfair trade practices and fraudulent interference with Loandepo’s contracts and potential economic benefits.
This isn’t the Orange County, California-based lender’s only illegal legal battle.
Company filed three lawsuits since April 2022 crosscountry mortgage in New York, California and Illinois.
In early June, a judge in the NY case ruled in favor of LoanDepot in a preliminary injunction barring CrossCountry and the employees who hired the companies from using data obtained from their former employer. It follows a judge’s decision in a Chicago lawsuit. However, according to the judge, since the loandepot did not show a “real and imminent” risk of irreparable harm, her request for a preliminary injunction against the solicitation of the loandepot’s employees was denied. The judge noted that “Loan Depot is likely to succeed on the merits of its Defend Trade Secrets Act claim.”
