• Expert Quote: "Members were chilled from pursuing outside employment opportunities by reason of the agreement," — plaintiff's lawyers.
• Forward Look: Watch for the court's interpretation of Washington State laws regarding the contracts. 

Overview bullets generated by AI with editorial review.   

A former Guild Mortgage loan processor filed a class action complaint against the lender, challenging the legality of its employee contracts and questioning whether they violate state labor protections. 

The development carries implications for mortgage businesses, necessitating examination of contract language, as the industry girds itself for an anticipated wave of contraction resulting from an originations slowdown and the elimination of roles through automation. Any decisions could set legal precedents that test lenders' terms of employment against state regulation and also their rights to penalize former managers for continuing to work with past customers. 

The plaintiff's argument

In a case that was moved to a federal court for the Western District of Washington this week, Sara Bublitz claimed Guild's employee confidentiality and restrictive covenant agreement violated workplace mobility and anti-moonlighting laws by effectively prohibiting staff paid below established income thresholds from supplementing wages with outside jobs. The employee agreement also restricts Guild staff from discussing wage information — a rule that runs against Washington's equal pay law — with possible fines of up to $5,000 for each infraction.

Guild's contract also fails to comply with state consumer protection rules, the suit said. The case was first filed in early October in a Washington Superior Court. 

"The agreement is not narrowly tailored to protect defendant's business interests, is designed to exert unnecessary control over their own workforce greater than allowed under Washington law and is likely to mislead reasonable employees regarding their compensation, working conditions and rights," the document stated. 

"Members were chilled from pursuing outside employment opportunities by reason of the agreement," lawyers wrote.

For management, the contract goes even further, restricting higher-level employees at the San Diego-based lender and servicer from working with "restricted customers" by selling similar types of goods or services offered by the company for one year after their departure.

No responses to inquiries sent to Guild Mortgage and plaintiff attorneys were received prior to article publication. 

Previously a loan processor at Guild from 2018 to 2025, Bublitz is seeking to represent a class of employees who worked at the company in the state over the past three years and were subjected to various terms of the contract. The class would include more than 40 individuals, plaintiff attorneys said. 

In addition to a class certification for her lawsuit, Bublitz requested resolution that includes a formal declaration to void provisions in Guild's employee agreement and make them unenforceable within Washington State. The plaintiff also asked the court to mandate Guild award statutory damages of at least $5,000 per class member as well as additional compensation.   

The court's consideration of the Washington State laws and any potential penalty to Guild's contracts marks another legal case involving mortgage employees pursuing class action charges against former employers for alleged labor violations.

Earlier this summer, Better Mortgage agreed to settle charges lodged against it by underwriters for unpaid overtime wages.  In another class action alleging unpaid overtime, Freedom Mortgage also agreed to settle a case filed this year that comprised over 900 remote call center workers employed at the firm between 2022 and 2026.