A federal judge has barred eight former Union Home Mortgage employees from originating loans in their local cities, a win for the lender in an ongoing lawsuit. 

The multichannel lender sued its ex-branch managers and loan officers this year after they moved to American Pacific Mortgage in January. The plaintiff firm accused its departed workers of breaching their nonsolicitation and noncompete agreements, and stealing some confidential company and customer information. 

U.S. District Judge J. Philip Calabrese on Monday partially granted UHM's motion for a preliminary injunction, placing restrictions on each defendant to work in their respective geographic areas for different lengths of time. The judge however denied UHM's requests for even longer bans across wider areas.

In a 71-page opinion and order, Calabrese wrote UHM is likely to succeed on its breach of contract claims regarding the noncompete provisions. The Strongsville, Ohio-based lender has frequently sued competitors and ex-employees for alleged thefts of trade secrets, including another pair of American Pacific Mortgage employees. 

Neither UHM nor attorneys for the parties responded to requests for comment Tuesday. 

Lender, ex-LOs raise accusations

The company sued its former employees in February in an Ohio federal court. While American Pacific Mortgage is not a defendant, the judge this week also enjoined the company from aiding defendants to violate the preliminary injunction.

UHM claims the APM originators immediately competed with the company in their former jurisdictions, violating their noncompetes. Defendants later testified they originated, or anticipated originating loans in the same geographic areas where they worked for UHM.

A UHM vice president told the court that defendants by the summer had closed almost 100 loans with clients suspected of being its own active customers. One of the former LOs admitted to taking a screenshot of an Encompass list, while another acknowledged sending emails to himself, before his departure, of loan applications, according to Calabrese's filing. 

The defendants countered the accusations with various reasons for leaving UHM, including alleged mistreatment, encouragement to falsify the source of leads and violations of the loan officer compensation rule. The judge mentioned those arguments but did not weigh them further in his legal analysis.

What the judge decided

Calabrese barred the defendants from originating in their respective cities in Maryland, North Carolina, Pennsylvania and Virginia, for durations of between three months up to a year. The judge wrote he wasn't swayed that the bans should extend beyond multiple cities or counties. 

The eight defendants are also subject to a 1-year non-solicitation ban regarding former UHM colleagues and customers. The bans begin from the date of the order, Dec. 29. 

The case remains pending. 

In October, UHM agreed with American Pacific Mortgage to voluntarily dismiss the Ohio lender's similar case against a married couple it accused of taking confidential information to the competitor.