To the poached goes the early preliminary ruling against the poacher. A Southern District of New York federal judge has issued a preliminary injunction against CrossCountry Mortgage and its employees from using confidential business information from loanDepot.
In her order, Judge Lorna G. Schofield ruled CrossCountry and anyone acting in concert with the company is restrained from directly or indirectly contacting or soliciting any customer or prospective customer contained in information taken when a group of employees left loanDepot in 2022. The judge ruled loanDepot would “suffer immediate, substantial, and irreparable harm” without the preliminary injunction and that loanDepot is likely to succeed on the merits of all of its trade secrets claims.
In the original complaint, lawyers for loanDepot minced no words in alleging between February 23, 2022, and July 13, 2022, CrossCountry improperly poached “no fewer than 32 loanDepot employees from loanDepot branches in Manhattan, Brooklyn, and Fishkill, New York by interfering with loanDepot’s contractual and other legal rights.” The company charged an initial review determined many of the employees took valuable loanDepot trade secrets and proprietary customer information with them when they left for CrossCountry and that CrossCountry is actively using this information to capture loanDepot business and customer relationships.
The injunction covers any documents in the 24 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, or 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 possessed after leaving loanDepot. The judge ruled all of the materials must be returned to loanDepot that was in the employees’ possession before jumping over to CrossCountry.
The original complaint also said CrossCountry has done this to loanDepot before, and it “has already been compelled to seek relief from CrossCountry attacks in New Jersey, California, and Illinois.” In the New York poaching suit, loanDepot said CrossCountry targeted the highest-producing loan originators who had “Chairman’s Elite” status, a recognition reserved for loanDepot’s top 250 producers. The complaint said the poached workers accounted for approximately 81% of the loan volume achieved by loanDepot’s New York operations in the year prior to their departure. Some of the employees had worked for loanDepot for over a decade.
