Quicken Vs loanDepot

The former employees — Wendy Beale, Lydia Garza, Dustin Andersen, Colin Korolsky, Ayrula Ayrula, Baron Tyler Cose and Wyman Jacobs — each signed an employment agreement when they joined the Detroit-based lender.

The agreements included a non-compete covenant as well as another covenant that prohibited them from raiding Quicken employees.

Under the agreement, the employees were prohibited communicating with current employees of Quicken or its 40 associated entities for two years. In addition, there was a ban on communicating with former Quicken employees for 12 months after their termination.

The agreement protected Quicken’s investment in new employees, who are given intensive training and take around nine months to become productive. The online lender also pays for license costs and a $1,000 bonus for each state the employee becomes licensed in — up to $10,000.

Quicken filed a lawsuit in an Arizona court against the defendants after they left to join loanDepot because, it alleges, they violated the contracts by communicating employment opportunities at loanDepot to other Quicken employees. It sought injunctive relief and monetary damages.

loanDepot, which subsequently intervened in the lawsuit, and the employees argued that that the provision was unreasonable and unenforceable as a matter of law.

Finding that the restrictive covenants at issue were “overbroad and unreasonably restrictive on the employee,” the trial court granted a summary judgment in favor of the defendants. It also determined that Quicken failed to meet its burden of proof “establishing a legitimate business interest in these provisions as written.”

The employees and loanDepot were awarded reasonable legal costs and attorneys fees.

Quicken filed an appeal with the Arizona Court of Appeals challenging the trial court’s decision to award fees.