BREAKING: Realogy hits Compass with huge suit to take them down
(NEW YORK, NY) — Light has finally been shed on the SoftBank-backed brokerage’s unfair business practices. Compass has been accused of price-fixing, poaching, collusion, and theft of confidential information and intellectual property.
The wide-ranging lawsuit was filed by Realogy, the country’s largest brokerage conglomerate. The 68-page document opens with accusing Compass of “unfair business practices and illegal schemes to gain market share at all costs and to damage, or even eliminate competition,” the suit said.
“Unfair business practices and illegal schemes to gain market share at all costs and to damage, or even eliminate competition.”
The pattern of inappropriate behavior has caused national attention upon not only Compass but the real estate industry. Compass’ schemes are catching up to them now, causing massive damage across the board, where even their CEO Robert Reffkin is under fire.
The complaint details Reffkin of personally soliciting Realogy to enter into an illegal price-fixing agreement “where the two companies would agree to limit agent compensation and ‘compete on brand,’ but not on price.” Realogy said it declined the offer.
Realogy’s Ryan Schneider and Compass’ Robert Reffkin discussed their differing visions for the residential real estate market at Inman Connect New York 2019 Source: INMAN.com
Compass has been exposed for its modus operandi, entering new markets by targeting top agents and firms, and coaching new recruits on how to navigate non-competes.
In an attempt to fire back, Compass released: “instead of building a better future for the real estate industry, our competitors are using the court system to stifle competition, but these efforts have been unsuccessful.” Yet, when a company has been sued multiple times for fraudulent actions, the truth will always prevail. Although competition is healthy in the marketplace, Zillow argues that Compass’ practices are “something different… they are unlawful.”
“Something different… they are unlawful.”
Compass is no stranger to suits, Zillow, Corcoran and Citi Habitats (to name a few) have already sued Compass, alleging the firm hired staffers in violation of their non-competes. Compass fired back with “you cannot break a non-compete by leaving to go to a company that does not compete with you.” Zillow states that Compass is a “direct competitor.”
This is the third major suit to hit Compass within the last three months. The first two suits, one filed in federal court and the other in Washington State court, were done by Zillow Group, alleging Compass hired three top technology staffers in violation of their non-competes and claim that the $4.4 billion brokerage actively sought to obtain proprietary information from Zillow to avoid building its own technology. The three staffers are accused of taking proprietary information from Zillow the days before they left, copying confidential customer lists, financial information, sales data and technological information on thumb drives and to DropBox.
“They are unlawful, and because we have a responsibility to protect our intellectual property, we are taking action,” said Zillow. Just like the former, Realogy said in a statement “and integrity is the bedrock of our industry. But when a competitor jeopardizes that integrity with illegal and unfair actions, we take it very seriously.”
“But when a competitor jeopardizes that integrity with illegal and unfair actions, we take it very seriously.”
Compass has been cited with more than a dozen lawsuits in the past five years, that has also involved the theft of proprietary and confidential information. With this pattern of fraudulent behavior, what will be the future of Compass?