Guild Mortgage Company LLC v. CrossCountry Mortgage LLC (May 27, 2026, No. D085036) 2026 WL 1505950
A mortgage company allegedly conspired with employees of a competitor to steal the competitor’s workforce and business. The competitor firm sued the mortgage firm that hired the competitor’s employees for aiding and abetting the employees’ commission of a tort, intentional and negligent interference with prospective economic advantage, tortious interference with contract, and violation of the Comprehensive Computer Data Access and Fraud Act (CCDAFA; Pen. Code, § 502), and unfair competition statute (UCL; Bus. & Prof. Code, § 17200 et seq.). The trial court dismissed the action on demurrer, and the competitor firm appealed.
The Court of Appeal reversed. On the aiding and abetting claim, the court held that California law imposed an actionable duty of loyalty on the employees of the competitor firm whom the mortgage firm hired away. “[I]t is the law in this state that ‘an employee, while employed, owes undivided loyalty to his employer.’ . . . ‘While California law does permit an employee to seek other employment and even to make some “preparations to compete” before resigning . . . , [it] does not authorize an employee to transfer his loyalty to a competitor.’ ” Noting that “ ‘tort law is designed to vindicate social policy,’ ” the court concluded that “conduct of the sort alleged in the present case violates a social policy meriting imposition of tort remedies.” The court further held that all of plaintiff’s remaining claims survived.
