Updated · California Employment Law Report · Jun 12
California Appeals Court Revives Guild Mortgage Suit, Citing $10.6 Million Loyalty-Breach Award
Updated
Updated · California Employment Law Report · Jun 12
California Appeals Court Revives Guild Mortgage Suit, Citing $10.6 Million Loyalty-Breach Award
1 articles · Updated · California Employment Law Report · Jun 12
Summary
A California appeals court reinstated Guild Mortgage’s case against CrossCountry Mortgage after a trial judge dismissed it, holding employees owe undivided loyalty while still employed and managers may owe fiduciary duties.
The ruling stems from Guild’s claim that over 18 months CrossCountry worked with Guild staff to recruit coworkers, divert customers and shift active loan applications before resignations gutted a branch of dozens of employees.
The court said those allegations can support tort claims, rejected a broad reading of AMN Healthcare, and found a competitor may face aiding-and-abetting liability for knowingly assisting disloyal employees or fiduciaries.
It also held CUTSA did not preempt Guild’s interference claims and, in a published first-impression ruling, said California’s computer-access law can support standalone civil claims for unauthorized system access.
Guild had already won arbitration against three alleged ringleaders, with the branch manager ordered to pay more than $10.6 million, underscoring that California’s noncompete ban does not shield pre-resignation disloyalty.
With non-competes banned, how can companies legally recruit top talent without facing a lawsuit for 'corporate raiding'?
In California, where is the line between preparing to leave a job and actively sabotaging your employer for a competitor?
Guild Mortgage’s $11 Million Victory Revived: California Court Clarifies Employer Protections in Employee Raiding Disputes
Overview
On May 27, 2026, the California Fourth District Court of Appeal reversed a lower court’s dismissal of Guild Mortgage Company’s claims against CrossCountry Mortgage LLC, reviving allegations that CrossCountry orchestrated a 'raid' on Guild’s Kirkland, Washington branch in 2021. The Superior Court had previously dismissed the case, finding Guild’s claims either preempted by the California Uniform Trade Secrets Act or insufficient. However, the appellate court disagreed, allowing Guild’s claims to proceed and marking a major turning point in the dispute. This decision highlights the importance of legal duties and protections for businesses facing aggressive competitive tactics.