Stockton Mortgage filed a lawsuit in Alabama federal court against 18 former employees and Novus, a competing mortgage lender, accusing them of stealing trade secrets and tortious interference. All defendants have denied the allegations.
The case centers on whether departing Stockton staff improperly transferred proprietary business information, client lists, or operational procedures to Novus. Stockton Mortgage claims the exodus of employees to a rival firm, combined with alleged data transfers, damaged its competitive position and client relationships.
Novus and the individual defendants rejected these claims in their court filings. The defense strategy typically challenges whether Stockton Mortgage can prove the information qualifies as genuine trade secrets under Alabama law, whether the defendants actually accessed or used protected materials, and whether any harm resulted from alleged misconduct.
Trade secret litigation in the mortgage industry frequently involves disputes over employee departures. Lenders protect pricing models, customer acquisition strategies, loan origination systems, and underwriting protocols. When employees move to competitors, tension erupts over what knowledge they can lawfully apply in new roles versus what constitutes theft of confidential information.
For Stockton Mortgage, the lawsuit represents an attempt to protect market position and client relationships during a period of staff turnover. For the defendants and Novus, the denial signals they will contest both liability and damages. The case outcome will turn on discovery evidence, witness testimony, and whether Alabama courts find the alleged information met legal standards for trade secret protection.
The litigation reflects broader industry dynamics. Mortgage originators compete aggressively for talent and customers. When loan officers, processors, and managers switch firms, disputes arise over non-compete agreements, confidentiality obligations, and what information they can bring to new employers. This Alabama case will test how courts balance employer protection of proprietary systems against employee mobility rights.