loan officer transfer question about leads- no noncompete clause
I am opening a new mortgage office. I have a prospective loan officer who currently works for another mortgage company. There is NOT a no-compete clause, so what we want to know is can he bring his current loans over? Is this considered stealing? If the customers are referals from his referal sources does this make a difference? Am I asking for a lawsuit? Thanks in advance.
1 answer | asked Jun 23, 2003 11:28 PM [EST] | applies to Ohio
Answers (1)
This is a trade secrets issue
Absent a non-compete, you still must comply with Ohio's trade secret's act. That Act prohibits an employee (the prospective loan officer) from "misappropriating" trade secrets. In addition, the loan officer has a "duty of loyalty" to his current employer not to take that employer's business away. In your words, courts do consider taking business away to be a form of stealing, which you must avoid.
A full discussion of what is a trade secret, a misappropriation and theft of a business opportunity is is beyond the scope of this answer. In short, do not let the loan officer bring over existing loans that have not yet closed. In addition, if the former employer took reasonable steps to keep the customer or leads lists secret, the loan officer probably cannot use them.
Regards,
Neil.
posted by Neil Klingshirn | Jul 1, 2003 10:20 AM [EST]
Absent a non-compete, you still must comply with Ohio's trade secret's act. That Act prohibits an employee (the prospective loan officer) from "misappropriating" trade secrets. In addition, the loan officer has a "duty of loyalty" to his current employer not to take that employer's business away. In your words, courts do consider taking business away to be a form of stealing, which you must avoid.
A full discussion of what is a trade secret, a misappropriation and theft of a business opportunity is is beyond the scope of this answer. In short, do not let the loan officer bring over existing loans that have not yet closed. In addition, if the former employer took reasonable steps to keep the customer or leads lists secret, the loan officer probably cannot use them.
Regards,
Neil.
posted by Neil Klingshirn | Jul 1, 2003 10:20 AM [EST]
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