NY hits a second title company for no-poach agreements

For the second time, the New York Attorney General’s office has entered into a settlement with a title insurance company over agreements with competitors not to poach employees.

Underwriter AmTrust Title Insurance, as well as its subsidiary First National Title Agency, will terminate any existing no-poach agreements, pay the state $1.25 million, and cooperate with Attorney General Letitia James’ ongoing investigations into the title insurance industry.

AmTrust is the second underwriter to settle with the NYAG. Old Republic International agreed to pay a $1 million fine last September to dispose of similar allegations.

“Workers should be free to make their own career choices without illegal corporate limitations,” said Attorney General James in a press release. “AmTrust’s no-poach agreements made this impossible and denied workers access to a fair labor market.”

Ironically, in the mortgage business, several lenders have gone to court over employees deciding to move on. Earlier this month, loanDepot sued CrossCountry Mortgage for hiring at least 32 of its New York employees.

Among the other poaching suits currently active, CrossCountry and Guild are suing each other, Caliber is suing CrossCountry and InstaMortgage is suing AHL Funding.

In the AmTrust case, the attorney general’s office accused the company of entering into both verbal and written no-poach agreements, with some intended to last even after any business relationship has ended.

AmTrust has not responded to a request for comment by press time.

However, the agreement stated, “AmTrust enters into this assurance for the purpose of resolving the OAG investigation only and this assurance does not create any rights for any third party. AmTrust neither admits nor denies the OAG’s findings.”

It also requires AmTrust to report any violations or potential violations of the settlement, or if the company learns of a competitor’s attempt to enter into or enforce a no-poach agreement for the next 10 years.

AmTrust is the fifth largest commercial underwriter in the U.S., while First Nationwide is one of New York’s largest agencies, the settlement filing said.

New York is a significant market for title insurance. The state ranked fourth for premiums written in the first quarter, at $362.7 million, according to the American Land Title Association. And when state regulators rejected Fidelity National’s attempt to acquire Stewart, it was the first nail in the coffin for the deal.

AmTrust was the seventh largest individual underwriter in New York in the first quarter (sixth if the activities of two Fidelity National underwriters are combined) with a 3.7% market share, ALTA said. That is much larger than its nationwide share of 0.42%.

The ALTA data does not distinguish between residential and commercial transactions.