The U.S. Court of Appeals for the Sixth Circuit recently vacated a trial court’s injunction granted to enforce various noncompete, non-solicitation, and confidentiality provisions in a mortgage lender’s employment agreement with a loan officer.

A copy of the opinion in Union Home Mortg. Corp. v. Cromer is available at: Link to Opinion.

The appeal arose out of an employment agreement (the “Agreement”) signed by a loan officer (“Employee”) during the course of his employment with a mortgage company (“Employer”). The Agreement was entered into by Employee and Employer in March 2019, when Employee was made “a team leader/managing loan officer.”

Pursuant to the “Restrictive Covenants” provision in the Agreement, Employee agreed that (1) for approximately three years and six months he would not “become employed in the same or similar capacity as [he] was employed with [Employer] by … any entity that competes with [Employer] in the home mortgage banking or brokering business” within “a one hundred (100) mile radius from either [Employer]’s headquarters or any branch office…to which [Employee] [wa]s assigned,” and (2) for approximately four years and six months, Employee would not “employ or seek to employ any person who [wa]s employed by [Employer] or otherwise directly or indirectly induce such person…to leave his/her employment.”

In 2020, Employee contacted another loan company (“Competing Company”) informing them that he was seeking to move himself and his team in a short time...

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