SEATTLE, WASHINGTON – Mortgage lender Guild Mortgage has filed a petition in a district court in Washington to confirm a $10.7 million arbitration award against three former employees accused of poaching. The employees, Christopher Flowers, Cory Flynn, and Lisa Jolliffe, allegedly diverted Guild’s customers and employees when they joined rival company CrossCountry Mortgage. Guild claims the group stole significant amounts of information, recruited its employees, and created confusion among its customers. The lender has asserted claims for breach of contract, fraud, unfair competition, and tortious interference.
The case began in August 2021 when Guild filed a demand for arbitration. In response, the defendants denied the allegations and Flowers, the former branch manager, filed a counterclaim alleging harassment and hostile work environment. After approximately one year, an arbitrator issued and signed Guild’s award, but the defendants have not complied or indicated that they will do so. Consequently, Guild filed a petition in the U.S. District Court in Seattle on December 19, 2023, seeking confirmation of the award.
However, the former employees have filed a cross-petition in Washington and California to vacate the arbitration award. They argue that since the final award was made in San Diego, that venue should be the exclusive location for the case. They claim that the award included speculative lost profits and exorbitant attorney’s fees and costs. Guild’s arbitration award consists of $7.4 million for lost profits, $500,000 in damages, $383,902 in disgorgement, and $2.4 million for attorneys’ fees and costs.
The former employees explained that they transitioned to CrossCountry Mortgage because Guild’s senior management neglected the high-performing Kirkland branch and failed to offer competitive products. Guild has also filed a lawsuit against CrossCountry Mortgage in October 2021, claiming civil conspiracy and tortious interference, which was dismissed due to a lack of diversity jurisdiction. The lawsuit was re-filed in the Superior Court for the County of San Diego, California, but some claims were dismissed based on California Uniform Trade Secrets Act preemption.
This legal battle between Guild Mortgage and CrossCountry Mortgage follows tensions that arose between the two companies over recruiting. Additionally, CrossCountry Mortgage previously sued Guild for allegedly poaching a former Las Vegas branch manager and encouraging her to steal proprietary information, but that lawsuit was dismissed after four months.
Guild Mortgage is seeking confirmation of its $10.7 million arbitration award against the three former employees accused of poaching. Meanwhile, the former employees are attempting to vacate the award by filing cross-petitions in Washington and California. The lawsuit exemplifies employer overreach and the consequences of mandatory arbitration, according to Maureen Mitchell, the attorney for the former employees. Guild Mortgage has not provided comments on the lawsuit, while CrossCountry Mortgage has stated that it does not comment on legal matters.