Former Keller Williams brokers had filed swimsuit in latest months over the corporate’s now-abandoned plans to slash revenue sharing for brokers who jumped ship for rival brokerages earlier than April 2020.
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Keller Williams has reached an settlement to settle a string of lawsuits filed by former brokers who challenged the corporate’s previous plans to chop its revenue sharing program, in keeping with a court docket entry filed on Friday.
Quite a few former brokers have filed proposed class-action lawsuits in latest months over the firm’s scrapped plans to slash its revenue sharing for brokers who jumped ship and labored for a competitor.
A number of of these lawsuits have been almost equivalent, and a few sought to dam the corporate from making revenue share distributions till the courts weighed in on the matter.
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On Friday, attorneys for one of many plaintiffs knowledgeable america District Court docket of Maine that they had reached an settlement to settle the case with Keller Williams, and that the settlement could be accomplished inside the subsequent 30 days.
The submitting was made in a case filed in Might by James McFarlane, a Keller Williams agent who was an affiliate dealer with the franchisor from 2004 to 2018.
McFarlane, like different former brokers and brokers suing the corporate, moved to dam Keller Williams from making modifications to its revenue sharing program retroactive. The corporate had quickly sought to use the modifications to brokers who left earlier than 2020.
“The Profit Sharing Program was developed to be a way to reward those associates who helped build the company,” McFarlane wrote in his criticism. “The Profit Sharing Program was designed to be an open-ended profit sharing program that allowed Keller Williams associates, investors, Team Leaders, Market Center staff, Keller Williams staff, and Regional Directors to participate in profits they helped to create without assuming any financial risk.”
Keller Williams spokesman Darryl Frost confirmed the settlement to settle most — however not all — of the lawsuits.
“The McFarlane case, as with the other cases brought by the same law firm, challenged certain profit-share program revisions that were never implemented,” Frost mentioned. “The matters have been amicably resolved and settled.”
Keller Williams agreed to settle lawsuits that have been filed inside weeks of one another by plaintiffs who have been represented by the Missouri legislation agency Humphrey, Farrington & McClain. These instances embrace:
- Jerri Moulder
- Michael Devlin
- Eric Mendoza
- Jana and Dennis Caudill
- Penny Alper
- Paul Davis
- Edward Fordyce
- Kevin Ortiz
- Robert Hill
Attorneys for the plaintiffs and Keller Williams should full the settlement inside 30 days.
Keller Williams started making modifications to its revenue sharing recruitment instrument in 2020, when it introduced that associates who joined Keller Williams on or after April 1, 2020 after which jumped to a competitor would not obtain revenue shares from the corporate’s lifelong income program.
In August 2023, the corporate moved to make that coverage retroactive. The corporate’s management council voted to decrease the revenue share for brokers who joined Keller Williams earlier than April 1, 2020 and bounce to a competitor from one hundred pc to five p.c.
The deliberate change gave the impression to be an try and get the defectors to return to Keller Williams, as it will have given brokers affected by the coverage six months to return.
In March, impacted brokers started submitting their class-action lawsuits, and inside weeks Keller Williams deserted its plans to make the modifications retroactive.
As a substitute of the modifications, Keller Williams moved in Might to keep up its present coverage, which permits brokers who joined the corporate earlier than April 1, 2020, to gather one hundred pc of their revenue share quantity even when they go away the agency to work for a competing brokerage.
Vested brokers are those that be a part of KW and stay affiliated for seven consecutive years. Such brokers who don’t actively compete with KW is not going to be affected. The corporate defines “actively compete” as when an agent disassociates from a Keller Williams brokerage and joins a non-KW brokerage or induces an affiliate to affiliate with a non-KW brokerage.
Frost confirmed on Wednesday that this stays the corporate’s newest model of its revenue sharing program.
