The Real Deal New York

Compass calls itself the little guy, seeks dismissal of Hamptons restraining order

Saunders & Associates sued brokerage after a former agent allegedly stole listings

January 13, 2016 08:00AM
By E.B. Solomont

RobertReffkinMegSalemAndrewSaunders

From left: Robert Reffkin, Meg Salem and Andrew Saunders

Compass just wants to be left alone.

The startup brokerage – which was sued last month by Hamptons firm Saunders & Associates after a former agent allegedly stole listings and handed them off to Compass – has asked a federal judge to dismiss complaints against it.

In a motion filed in the U.S. District Court’s Eastern District, Compass said it returned the listings data to Saunders and fired the agent in question.

“There is nothing left for Compass to do,” the firm stated in court documents dated Jan. 7. “Saunders is using its suit against Compass in a transparent attempt to stifle legitimate competition from Compass in the Hamptons real estate market… At this point, Compass should be allowed to resume its real estate business without disruption.”

Saunders slammed Compass and former agent Meg Salem with a lawsuit on Dec. 7, alleging that Salem stole more than 11,000 listings from Saunders and turned the data over to Compass. After a judge issued a temporary restraining order, Compass fired Salem, saying that it “holds its agents to the very highest standards and has very clear company rules.”

In the new motion, Compass denied knowing that Salem copied listings from Saunders’ internal database, and said it only learned about the allegations when Saunders filed its lawsuit. Compass said it subsequently returned Saunders’ information.

Saunders, however, alleges that Compass turned over just 220 documents – a fraction of the “thousands of pages of documents” obtained by Salem’s team.

“These listings are the lifeblood of our business and I want them back,” said Andrew Saunders, CEO of Saunders & Associates. “I want to know what happened to them.”

Saunders cited a sworn declaration by former Salem teammate Jess Spooner, who said he saw Salem turn over at least 1,000 sheets of paper to Compass, each one containing multiple listings.

 “There was an outright theft from my company, and mounting evidence that [Compass] not only knew about it, but embraced it and took the information,” Saunders added. “It’s not an innocuous thing.”

A spokesman for Compass said the claim that the brokerage needs to return 11,000 listings “has never made sense, since we have less than 1,000 listings in our database.” Compass expects an uptick of listings following its recent merger with Hamptons-based Strough Real Estate Associates.

In an amusing footnote in the case, Compass’ motion describes the firm as a “small real estate start-up that launched in 2013.”

But that assertion is somewhat dubious. In September, the firm raised $50 million in a Series C financing round, bringing the total investment to $123 million. Sources have valued the firm, which now has close to 300 agents, at $800 million.

By comparison, Vector Group Ltd. paid $60 million in 2013 for a 20.59 percent stake in Douglas Elliman, New York City’s largest residential brokerage. That deal would seem to value Elliman at just over $291 million.

Compass is using a good chunk of its venture funding to expand into new markets, including several in the Los Angeles area and the Hamptons.

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