Loandepot, Movement Mortgage dismiss poaching case

Loandepot and Movement Mortgage have agreed to toss the former's poaching lawsuit, ending the competitors' moves to depose rival senior leaders. 

The lenders did not say if they reached a settlement, according to a federal court filing by their attorneys published Friday. The stipulation of dismissal with prejudice, meaning it cannot be refiled, said each company would bear its own attorney's fees and costs. 

The complaint filed last June accused Movement of paying for recruiting trips for Loandepot employees, who subsequently switched firms and took trade secrets with them. The alleged poaching of 26 employees took place in late 2021. 

Movement denied the allegations and filed a counterclaim last July, accusing Loandepot of harassing its former workers through arbitration proceedings. The South Carolina firm also cited "public turmoil" as reason for Loandepot employee departures, including a wrongful termination lawsuit and massive job cuts. 

A spokesperson for Loandepot and attorneys for both parties declined to comment. Movement did not respond to inquiries.

The sides in recent months sparred over discovery topics, including depositions for leaders from both companies. Employees who switched to Movement called their deposition requests "overly broad", while Loandepot cited the "Apex Doctrine" to shield a senior leader from testifying under oath. The motions were recently extended through the fall. 

The case's resolution in Delaware federal court is the latest conclusion to a poaching dispute between mortgage lenders, after many were filed at the tail end of the recent refinance boom. Academy Mortgage last month agreed to pay an undisclosed sum to Nations Lending to settle a raiding case involving seven Hawaii-based employees. 

Movement is still suing another competitor and its CEO for raiding and theft of trade secrets claims. The company reported over $19 billion in origination volume last year, according to Home Mortgage Disclosure Act data. 

Loandepot, one of the nation's top lenders and servicers, is still pursuing similar claims against Ohio giant CrossCountry Mortgage in two separate courts. One of the yearslong cases in Illinois is scheduled to go to arbitration in September, while the sides are currently arguing discovery in a New York case, according to federal court records. 

CrossCountry, one of the nation's top independent mortgage banks, is also yet to respond to a recent federal complaint by an employee over remote work expenses. A spokesperson for the lender said Friday the company does not comment on legal matters.