Movement Mortgage used all-expenses paid recruiting trips to entice employees to leave loanDepot and take the company's trade secrets with them, the latter lender claims in a new lawsuit.
LoanDepot is suing Movement for violating the Defend Trade Secrets Act, along with six other counts, in a federal complaint filed last week. The industry giant claims its competitor poached over 25 employees in a three-month span in late 2021, around the time other rivals were
The publicly traded firm in a statement Monday recited the opening of its lawsuit, which describes fair competition.
"Inducing individuals to breach contractual prohibitions against employee solicitation and misuse of confidential information in order to steal business and customer relationships crosses the line into unfair competition, and we will continue to vigorously protect our interests," the statement said.
An attorney for loanDepot declined to comment Monday, while Movement didn't return a request for comment. A summons for Movement was issued last week in the U.S. District Court for the District of Delaware, according to court records. LoanDepot also said it is in arbitration with several of the named employees.
Among the numerous poaching battles between mortgage firms in courtrooms nationwide, loanDepot is suing two rivals across three federal complaints. Federal judges in Illinois and New York in the past six months have
Movement began its raid in September 2021 when it invited Sean Johnson, then a loanDepot area sales manager in Virginia, on an all-expenses paid trip, according to the complaint. Following the trip, Johnson began sending company information to his personal email address, including loanDepot financial data, growth strategies and loan details.
Johnson in October took several loanDepot employees to Nashville on another all-expenses paid trip hosted by Movement, the suit claims. He resigned Oct. 26, 2021, to work as a regional sales manager for Movement at a Fairfax, Virginia office a quarter of a mile away from his old post.
"When asked by his supervisors about his departure, Mr. Johnson stated, 'I'm taking my team with me,'" the suit said. "An acknowledgment that he recruited them while he was still employed by loanDepot and orchestrated their synchronized notices with Movement."
Johnson allegedly also signed an exit acknowledgement declaring he returned all confidential information to loanDepot despite his prior confidential data file transfers. The company claims Movement has poached nearly 30 of its former employees from the Washington, D.C. metropolitan area, although it didn't identify each worker.
Clay Higgins, a loanDepot producing branch manager in Pinellas County, Florida, claimed Movement offered a $125,000 signing bonus to any loanDepot originators that switched to Movement, according to the lawsuit. He was allegedly fired in November 2021 when his supervisor learned he was on a recruiting trip to the Carolinas paid for by Movement while he was supposed to be managing the branch.
LoanDepot identified six total employees who switched to Movement in Florida, and another three in Pennsylvania who departed to the competitor, including one worker who the company has already sued.
Kevin Luchko, a producing branch manager for loanDepot in Philadelphia, abruptly resigned and moved to Movement in January 2022. LoanDepot filed a complaint against Luchko last March, claiming he stole an excel document that identifies over 10,000 individuals who sought or received a loan from loanDepot.
The sides reached a stipulation and are in arbitration, according to court filings in a Pennsylvania federal court. However, loanDepot in its most recent lawsuit claims Luchko accessed one of his former firm's customer files while at Movement as recently as last December.
LoanDepot is asking a judge to require Movement to return all of its information and destroy all copies, along with awarding it unspecified damages.
The nation's third-largest lender is in the
Movement, based in Indian Land, South Carolina, boasts 775 loan officers and over 4,500 employees across all 50 states. The company originated $22.9 billion in mortgage volume in 2022, with heavy lending in the Southeast, according to data from S&P Global.
Some lenders
