Realogy Alleges ‘Unfair Business Practices’ in Lawsuit Against Compass

July 11, 2019

Realogy filed a lawsuit Wednesday against Compass, accusing the tech-focused real estate brokerage of a range of allegations from price fixing to theft of confidential information.

In the 68-page complaint filed with the New York State Supreme Court, Realogy alleges “unfair business practices and illegal schemes to gain market share at all costs and to damage, or even eliminate, competition.”

The complaint accuses Compass of “poaching” competitors’ employees and independent real estate agents and then “luring” them to breach their noncompetition and nonsolicitation agreements to divulge confidential information they learned at their former jobs. The complaint goes on to accuse Compass CEO Robert 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 says it declined the offer.

Compass responded to the lawsuit with the following statement: “At Compass, we focus on providing the best possible experience for our employees, agents, and their clients. 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. Compass will continue on its mission to meaningfully improve the real estate industry and help everyone find their place in the world.”

Compass, a SoftBank-backed brokerage, was founded in 2012. It has faced several lawsuits from competitors since then. It has settled lawsuits stemming from 2015 with the Corcoran Group and Citi Habitats in New York. Zillow Group recently sued Compass and alleged the brokerage hired three tech staffers in violation of their noncompete agreements. Zillow and Compass reached an undisclosed agreement, and the lawsuit was dismissed this week. 

“Open and honest competition is part and parcel of our business,” Realogy said in a statement about its lawsuit. “We face it every day in markets all around the country. 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.”

Read Realogy’s full complaint.