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Judge Grants Preliminary Injunction In Poaching Lawsuit

Steve Goode
Dec 21, 2022
loanDepot

loanDepot sought to prevent CrossCountry Mortgage from using its customer info from former employees.

KEY TAKEAWAYS
  • Former loanDepot employees were ordered to return customer information the took with them

A federal judge in one of several poaching lawsuits filed against CrossCountry Mortgage has granted a preliminary injunction against the company, barring it from using proprietary information that the alleged poached employees took with them from their previous employer.

The lawsuit was brought by loanDepot, which alleged that six of its former employees and consultants took sensitive customer information that belonged to it to their new employer.

The suit names Steve Schneider, Cindy Smolin, Samantha Siegel, Fernanda Baske, Bob Bowman, John Noyes, and CrossCountry Mortgage as defendants.

U.S. District Court Judge Edmond E. Chang of the Northern District of Illinois on Tuesday granted loanDepot’s request for the preliminary injunction. It bars the defendants from contacting or soliciting any customer or prospective customer:

  • Listed on any document or email in their possession that contain customer information that was received from or prepared for customers while they were still employed by loanDepot, and
  • Any document that was downloaded from or contains customer information that was downloaded from loanDepot’s systems or databases, and
  • That the Individual defendants still have in their possession after leaving loanDepot.

The injunction does not apply to:

  • Customers who closed a loan with CrossCountry from Jan. 17 through April 15, 2022;
  • Customers who had a loan application or refinancing application pending with CrossCountry as of April 15, 2022;
  • Prospective customers who the defendants or CrossCountry identified through a means that is independent of the documents and emails referred to earlier.

The preliminary injunction also bars the individual defendants from:

  • Soliciting or inducing any loanDepot employees to leave the company for CrossCountry;
  • Accessing, utilizing, relying on, divulging, disclosing, transferring, reproducing, copying, storing, distributing, or misappropriating the previously mentioned documents;
  • Using any documents in the individual defendants’ possession after they left loanDepot that contain consumer information that was received from or prepared for customers while they were still employed by loanDepot; and
  • Any document that was downloaded from or contains customer information that was downloaded from loanDepot’s systems or databases that the individual defendants still have in their possession. 

The judge also ordered all of the defendants to: return all copies of the documents referred to in the order and any documents in the their possession after they left loanDepot that contain consumer information that was received from or prepared for customers while they were still employed by loanDepot; and any document that was downloaded from or contains customer information that was downloaded from loanDepot’s systems or databases, and that the individual defendants still have in their possession after leaving loanDepot.

In its lawsuit against CrossCountry, loanDepot claims the individual defendants signed agreements that barred them from taking customer information with them when they left the company.

loanDepot officials were not immediately available for comment.

The loanDepot suit is one of several filed against CrossCountry alleging that it poached employees and encouraged them to remove customer information from their former employers.

Caliber Home Loans — which is now a part of Newrez — and Guild Mortgage have both sued CrossCountry.

Company officials were not immediately available for comment.

Editors note: an earlier version of this article cited Guild Mortgage as now being a part of Newrez. Caliber Home Loans is now a part of Newrez.

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Dec 21, 2022
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