Title Insurer Ordered to Stop Poaching Staff

Giant title insurer Fidelity National Financial has won a temporary restraining order against a rival that it accuses of raiding its Southern California offices of employees, customers and trade secrets.

Fidelity sued Mercury Cos. and a number of former Fidelity employees, claiming they conspired to “cripple” the local operations of Fidelity’s Ticor Title subsidiary and other divisions.

The lawsuit, filed last week in Los Angeles County Superior Court, seeks unspecified damages. It contends that Fidelity has lost millions of dollars because of Mercury’s alleged uncompetitive practices, fraud and stealing of trade secrets.

Superior Court Judge Dzintra Janavs granted Fidelity’s request for a temporary restraining order barring Mercury from soliciting Fidelity employees. He set a March 29 hearing for a permanent injunction.

“Competition is good, but it should stay within the parameters of the law,” said John Hennelly, a Marina del Rey attorney representing Fidelity and its subsidiaries. Hennelly said cases filed by three other title companies against Mercury allege “a similar pattern of conduct.”

Calls to Mercury’s headquarters in Denver weren’t returned.

Christopher D. White, a former Fidelity manager named in the suit who works for Mercury subsidiary Investors Title Co., said the suit’s assertions were “not true” and declined to comment further.

Title insurance is purchased by anyone buying or refinancing a home as protection in case a title search exposes liens or other deed restrictions that would affect the transaction or a property’s value.

Jacksonville, Fla.-based Fidelity is the largest U.S. title insurer, with $7.7 billion in annual revenue.

Mercury, a privately held umbrella company for a group of title agencies and mortgage brokerages, posted revenue of $560 million last year, according to Hoover’s Online.

Fidelity contends that as part of the purported scheme, Mercury recruited Ticor employees by paying lucrative salaries and signing bonuses -- as much as $2 million in one case, according to the suit.

“The compensation packages provided to key personnel are so exorbitant as to amount to commercial bribery,” the suit says.

Before leaving Ticor to join Mercury, the employees were induced to delay processing customer orders so they could be fulfilled by Mercury, the suit claims. They also took with them files about employee salaries and other proprietary information, the suit says, and recruited other Ticor personnel “so as to prevent Ticor from being able to compete effectively” against Mercury’s companies.

The information gleaned from the files and from the staff enabled Mercury to under-price Fidelity, the suit contends. In all, Mercury says 48 employees were hired away from various Southern California offices, including two from which the entire office staffs defected.