Newrez is alleging James Hecht, former head of its retail operations, staged a ruse in which he abruptly left to a direct competitor and brought his colleagues, a handful of divisional managers, along with him.
According to the suit, prior to departing to OneTrust Home Loans on Feb. 1, where Hecht is now CEO, he
Additionally, Newrez is accusing OneTrust Home Loans of conspiring with Hecht in this alleged ploy.
"Hecht acted in his own interest instead of the best interests of Newrez by orchestrating the departure of senior Newrez executives who he then immediately handpicked as his executive team at OneTrust," the mortgage lender said in its suit.
The lender is suing for breach of contract, misappropriation of trade secrets, unfair competition and tortious interference with existing contracts.
Newrez declined to provide commentary, however, its spokesperson added "the facts and the law will speak for themselves in court."
OneTrust implied that Newrez's assertions are a lie.
"Any claim that James Hecht took confidential information or orchestrated the departure of Newrez employees is absolutely false," wrote Josh Erskine, founder of OneTrust Home Loans, in an email Friday. "A close reading of the complaint filed by Newrez reveals that its allegations of misconduct by James are based upon unfounded speculation and innuendo. I encourage all who are interested to read the actual litigation pleadings, including our response, before jumping to any conclusions on what is really going on."
The suit, filed in a Pennsylvania federal court, alleges Hecht's plan to depart Newrez and bring along his coworkers was hatched in mid-January during a corporate meeting in Arizona.
During said meeting, Hecht, who was tasked since late 2023 to explore a potential sale of Newrez's
He recommended for Newrez to restructure its retail mortgage business. On Jan. 31, Hecht laid off seven managers as an alleged means to restructure, but then quit himself.
Newrez claims that Hecht "synchronized his own resignation to coincide with his decision to release the other senior executives from employment at Newrez" and that it is "inconceivable that all the senior executives simultaneously made a decision to resign to join the same competitor without extensive coordinated preparation."
Overall, Hecht's role at Newrez was multifaceted. As the head of Newrez's retail mortgage business, Hecht formulated short and long term business strategies, analyzed the potential sale of this business and made personnel decisions, filings show.
He was able to successfully execute this role because he had unlimited access to "Newrez's most sensitive confidential information and trade secrets to execute those responsibilities," the lender said. Newrez claims this access gives Hecht an advantage in further soliciting other Newrez employees to join OneTrust, and that its competitor has already started doing so.
Specifically, Hecht had complete knowledge of the loan originators' production and compensation information, the lender claims. "That information to formulate compensation offers on behalf of OneTrust that would be sufficient to incentivize the larger producers to jump ship from Newrez for OneTrust," the suit said.
Newrez also points the finger at OneTrust for trying to secretly acquire its retail operations by unlawful means.
"OneTrust, rather than seek to acquire Newrez's business operations directly from Newrez for consideration (i.e., by lawful means), conspired with Hecht to acquire Newrez's business operations indirectly," the lender claims in its legal filing.
Newrez is asking for the court to prohibit OneTrust from hiring its current or recently former employees. It also wants to bar Hecht from employment at his current company.
