Homestead Poaching Lawsuit Moved To Federal Court

A lawsuit filed by Homestead Funding Corp. in New York State Court alleging that Fairway Independent Mortgage Corp. had poached a high-earning employee and enticed several others to do the same has been transferred to federal court in the Northern District of New York at the request of Fairway’s attorneys.

The original suit, filed in June, alleged that Fairway paid Andrew Aiello, “a seasoned loan originator” who was bound by an employment agreement, a $600,000 signing bonus and promised him another $500,000 productivity-related bonus to leave Homestead.

According to the suit, the bonus would kick in if Aiello closed $200 million in loans in two years. The suit alleges that the high amount of closures required for Aiello to earn the bonus served as "a thinly veiled attempt to entice Aiello to recruit other loan originators from Homestead — who were also under contract."

The suit also sought a permanent injunction against Fairway to prevent it from poaching any more of Homestead’s employees. Homestead, according to the suit, notified Fairway in May that Aiello and all of its loan originators were bound by employment agreements that automatically renewed if they were not terminated at least 60 days in advance.

Homestead is seeking a minimum of $400,000 in damages.

Fairway denies Homestead’s claims.

According to court documents, the venue for the suit was changed because it is between citizens of different states and “the amount in controversy is greater than $75,000.”

Homestead’s principal place of business is Albany, N.Y., while Fairway, which was organized under Texas state laws, is principally located in Madison, Wis.