The Real Deal New York

Corcoran sues Compass for “brazenly” raiding its talent pool

Brokerage accuses startup of unfair tactics; seeks restraining order
By E.B. Solomont and Kyna Doles | March 23, 2015 06:27PM

The Corcoran Group, which has been hemorrhaging agents to startup brokerage Compass in recent months, slammed the rival brokerage with a lawsuit today alleging it “brazenly and intentionally” raided key Corcoran offices.

According to the suit, Compass used “unlawful methods” in a “coordinated, multi-front assault of unfair competition” that threatens Corcoran’s New York operation with “irreparable harm” if it is not stopped. The suit, which seeks a temporary restraining order against Compass, also named former Corcoran agents and managers Maryanne Farrell, Eugenio Martinez Huet, Patrick Brennan, Debra Bondy, Claire McFeely and 100 “John Doe” defendants.

As of last week, Compass hired 51 agents from Corcoran, representatives of the firm told The Real Deal on March 16. Its most recent additions were Williamsburg agents Lior Barak and Christine Blackburn, who led Corcoran’s top Williamsburg team from 2010 to 2013.

In a similar suit filed last year, Compass was sued last year by Citi Habitats, which claimed someone from Compass hacked into Citi Habitats’ proprietary listings database and used information to poach top brokers.

“Compass has simply shifted its focus from Citi Habitats to Corcoran and launched a larger scheme of misappropriation, breaching contracts and unfair competition in an effort to take down Corcoran’s New York operation,” according to the suit, which seeks $1 million in compensatory damages.

In a statement, Corcoran said it did not comment on ongoing litigation.

But CEO Pam Liebman referenced the competition from Compass during a March 5 interview with TRD. “I’m a big believer in what we’re doing here and we have traditionally had more top brokers than any other firm,” she said. “So if I was doing a startup, who do you think I’d go after? I’d start at Corcoran.”

For its part, Compass said in a statement that it is “disappointed that Corcoran, in its attempt to retain agents who seek to join Compass, has sought to use the legal system to inhibit the freedom of independent contractors who are the chief executives of their own businesses.”

In the suit, Corcoran alleges that former Soho manager Gene Martinez lured nearly 30 managers and sales agents to Compass, and used confidential information to bring listings and business opportunities with him. Adding insult to injury, Martinez told Corcoran he was going to work for Compass’ Miami office. It turned out he was planning to work in its New York office, located less than two miles away, the suit states. (According to Compass’ website, Martinez is now director of sales and business development for Miami and Washington, D.C.)

[Related story: See “Inside a Compass job offer“] 

In the case of Brennan, the former senior managing director of Corcoran’s Park Slope office, Corcoran says in its suit that his move – and the move of two others from the same office – poses a threat to Corcoran’s Brooklyn business.

Despite a provision in Brennan’s termination agreement not to solicit Corcoran employees, Corcoran caught Brennan doing that very thing, the suit states. The suit adds that Brennan and Martinez shared information with Compass that led to Compass hiring 28 Corcoran agents. Corcoran said Brennan admitted in his resignation email that he downloaded information from the firm’s computer that was not entirely personal.

  • NYC Broker

    Really pathetic and sad that Corcoran would go to these measures. Compass should consider this a compliment.

    • Pat Pete

      Replying to you will probably only fall on deaf ears as you undoubtedly work at compass…but…

      Please read the complaint that was filed. What Brennan and Martinez did was just plain unethical!

      No doubt Corcoran is grabbing at anything to stop Compass from their recent surge in sales agents but still what happened was a giant back stab from two people who obviously have questionable ethics.

  • Wow

    I can’t believe they are suing former agents and employees. That’s a huge gamble.

    • none

      until this news I didn’t really like too much Compass, but looking at what is happening here I have completely changed my mind and I am 100% with them.

      • Pat Pete

        have you read the complaint? I think you will flip your opinion again.

  • Unbelievable

    What ever happened to free enterprise? How can Corcoran stop another company from growing. In any other industry that’s just “competition”.

  • Astor

    Real Deal loves to post FAKE TRENDING articles below the bad news of any companies. Play fair.

  • Esq

    Frivolous suit, I love how companies think they own their employees rather than properly incentivizing them to stay

  • Sideliner

    If Corcoran had something better to offer, would their agents be leaving? It’s sad and delusional on the part of Corcoran top brass. Best of luck to them with the Mean Girls routine.

  • Broker A

    As Ms. Liebman always says, “the door’s open” to any agent who wants to return. They’ve buttered your buns for far too long. They won’t be a coming back, so get over it.

  • david

    might be time for corcoran to start supporting their top agents.

  • Say What?

    Corcoran is the lowest form of dirt bags. Just par for these pathetic crustations called Corcoran. I guess there is a form of lower life back stabers!

  • Larry_Would

    I didn’t know you could sue someone for offering a better job

  • TomDUWS

    Brokers are independent contractors. Hard to understand how Corcoran thinks they have any means to stop movement to Compass. Any type of employment or termination agreement would seem to be in violation of independent contractor status. Yet another frivolous suit by a poor loser

  • Liam

    As a former Corcoran agent I can agree that the lack of support and strict adherence to corporate policy left me as a business owner with my proverbial hands tied.

  • Justice and Sweet Karma

    Corcoran have been doing the very same thing for decades… Sweet Karma!

    • Matzoh F

      Exactly. The few agents that have returned to Corcoran are only there because they were recruited back with a nice $$$$ sign on bonus and whatever they needed to sweeten the pot. This is a fact. And, YES Corcoran called them first. Agents have been very unhappy at Corcoran for some time. Pam just turned a blind eye. Now she’s finally waking up. Agents, talk, they look around and decide what works best for them. No one puts a gun to their head. When opportunity knocks they listen regardless of what company it is. Lots of top agents went to BHS and Elliman as well. Collectively Compass wound up with the most. If Barbara was still there this would have never happened. With Barbara it was agent first, with Pam it turned into agent last. If Compass and the others don’t deliver as promised many may wind up coming back. Too soon to tell.

      • Bob the Broker

        With Pam it is only agent first if you are a pretty boy or one of her golfing buddies. Actions speak louder than Pam’s words to the troops.

  • Sweet Karma

    Corcoran invented this type of “operation” – transferring agents from Douglas Eliman and Brown Harris Stevens to Corcoran, and visa versa DE and BHS did the same… How many times Bobby Brown moved to and from Corcoran, BS, and DE – 10 times?

  • john
  • gary malin
    • Night

      That is by far the best and valuable comment on this page. Thanks!

    • Ron

      Gary L. Malin Corporate President – Citi Habitats

  • Mr. Ronen

    Ha… Lawsuit, Restraining Order against their own agents??? They are out of their mind? They will not win! They are using a lawsuit and scaring techniques to stop this EXODUS. Why anyone would want to work for this company? More brokers will leave… The best yet to come.

  • lettuceny

    What am I missing here? This seems quite pathetic of Ms. Liebman and Corcoran’s executive management team. I am certain that while Compass might have recruited some agents from Corcoran it is very probable the majority of them reached out to Compass and explored the opportunity to see if i
    t made sense for them as independent contractors. Compass doesn’t have to call agents to recruit them. Agents are calling Compass asking to meet with managers there to see if Compass is the right fit for THEIR business.

    The real issue I see here is that Corcoran, BHS and Elliman are the old school, traditional brokerage that refuse to change with the times, and smart agents are realizing that. To further complicate matters for those traditional firms, their management, in large part, still feels they control the market because they control the data. Why do you think the traditional firms do not participate in the IDX feed available to all REBNY brokerage firms? Well it’s because those firms all believe that without their listings being shared on other brokerage’s web sites that the consumer will have to come to their site to find the listings. I am still trying to figure out how this can possibly be in the best interest of their sellers/clients. It’s this attitude that says “We are the best and the public needs us” that will likely be the beginning of the downfall of these firms.

  • The Crying Game…

    Corcoran’s management is in denial, they are against agent freedom (way too restrictive). Agents have a brain, they can go anywhere they want to go. Corcoran’s bully “scare tactics” will not work, Compass is just a better place to be ; )

  • Dick Tracy

    Say what you want, but the comments below are actually rather pathetic. One thing that was in the complaint that is correct and on the part of the those affiliated with Compass, a large swath of those that came from Corcoran are touting all their awards and other accomplishments while at Corcoran (and specifically naming Corcoran) on their web pages. Regardless of the legal merits (and Corcoran probably does have a case with this), this more importantly illustrates that these individuals believe there is still significant brand equity associating themselves with another operation, namely Corcoran. This type of equity is severely lacking at their current pit-stop. It is something that I have found to be very strange and almost cringe worthy when you read the bios of some of these folks. Whatever happens at this point, this probably doesn’t shade a positive light on things for Compass. They have altered their business plan several times, have changed their company name (aka the kiss of death with start-ups) and I have no question, have to be hemorrhaging money left and right. I mean, how could they not if everyone has 1-10% equity stake in the company? That’s like 600% of equity or something, right? Certainly has the potential to become a fatal flaw. We’ll see. Unfortunately a lot of people are looking at this entirely the wrong way.

    • Mike

      Sadly, you have no idea what you’re talking about. But unlike you, a lot of people are looking at this the right way. That’s why Compass will win.

    • comment flagged

      unless I’m missing something, independent contractors are Corcoran and still independent contractors at Compass. Compass does have a way to go to build their brand, certainly, but obviously everyone who has jumped thus far are betting on it.

    • Agent Angela

      the former agents from Corcoran “touting their awards” are doing it for identification only. They earned the awards and they are showing how a top agent with no awards at their new company is still a top agent.

  • EmpireNY

    Really lame of Corcoran to file suit against Compass. Did Corcoran forget real estate agents are independent contractors? Agree with Lettuceny comments: Corcoran. BHS and DE are old school firms who all feel a sense of entitlement as they control a large chunk of Manhattan business. Real Estate in Manhattan is definitely evolving for the good and the old shcool firms better wake up or you will be left licking your wounds. Why are these big firms not part of IDX is strange. Sure enough someday, someone will file a suit and old schools firms will need to comply. Their fiduciary duty as of now is to their own pockets and not to the sellers they serve

  • Sarah C.

    Compass is pathetic and will be a failure. You can’t buy a brand. Consumers have no idea who Compass or Town are but they DO know who Corcoran and Elliman are. It takes DECADES to build a brand. Compass is trying to buy a brand and they’re trying to steal agents since they will never be able to develop their own. They’re the most hated brokerage in NYC. Soon the good agents who didn’t get paid Compass equity to leave will all start to go back to the brand name firms. Compass will never be a brand…

    • comment flagged

      Most consumers know who TOWN is now. I think they’ve done a better job than anyone building a brand in a few short years.

    • Standard NYC

      Sarah it seems you are at Corcoran or DE. Let me what is it exactly that you bring to the table that agents at Compass or Town or any other other company can’t. People give business to YOU and they could care less what company you work with.

    • Ronie

      Brand? This is a huge EXODUS – 51 agents left… to Compass, and you are not questioning your own failures… It’s easy to blame others. Who is the most hated brokerage in NYC? YOU!

    • Bob the broker

      Sarah, you haven’t a clue. You are just a cheerleader for Corcoran, probably one of Pam’s buddies that is getting fed listings. Corcoran is the next J.I. Sopher who got swallowed up by Elliman as they had a bad business model. In 10 years it will be “Corcoran who?”

    • “A Dying Brand”

      Corcoran is a dying brand, their going through dying pains… Compass is the new star!

    • Tyrannosaurus Rex

      Who needs a “brand” when you you can hang your license anywhere or start your own firm?

    • Bob the Broker

      The same way Elliman swallowed the dying J.I. Sopher years ago which WAS the biggest name in Manhattan residential landlords, Corcoran will be in the same position in a few years if Pammy doesn’t stop looking over her shoulder to see what Elliman is doing instead of running a great company. How the mighty have fallen since the departure of Barbara and HOW she ran the company.

  • Standard NYC

    This suit just shows how weak Corcoran is. For those who are still at Corcoran there is still time to start the interview process and find a new home

  • Daniel

    HUGE EXODUS – 51 agents left Corcoran… to Compass. This is a frivolous lawsuit
    to stop this historic grand exodus from one single company! After the Summary Judgment it will be thrown out of court! You can only blame yourself!

  • Bob the Broker

    If Corcoran agents were TREATED WELL by Corcoran, they wouldn’t even have the idea in their heads to go to Compass. Corcoran has been losing a lot of the “non-bold faced name” brokers over the last 3 years as well to Elliman, Town, Halstead and Brown Harris Stevens because if you don’t bring in $1,000,000 in commissions per year you are a nobody at Corcoran.

    • Act 2

      100% correct

  • Stick to the important stuff

    Does Compass mandate that all their agents submit corny comments on Real Deal articles? Sounds like a bunch of 20 year olds with zingers like, “Compass will win” They should instead be concentrating on doing deals.

  • Pat Pete

    I have zero allegiance to Corcoran or Compass.

    Read the actually complaint the was filed to verify everything i state below.

    – Both Martinez and Brennan not only broke there non compete but blatantly lied and went after agents with malicious intent.
    – Also very interesting to see Martinez exact compensation in Exhibit 2 (hope Brennan has a similar deal… he might tell you he his but could just be another one of his lies… again)

    Regardless of what shakes out… both Brennan and Martinez will never get hired anywhere after Compass (talk about “pot committed”). You only get your integrity one time and once you lie, cheat or steal you are DONE.

    Also very interesting to see the compensation on Martinez at Corcoran vs. Compass:

    – 250k base with no bonus

    – 120k signing bonus
    – 400k salary that increases 25k per year for 5 years
    – 20% of all deals he brings in, .
    – 175k bonus if he hits a 10mm GCI
    – And last but not least….drum roll….. 58,979 shares of common stock (I guarantee this is what we like to call Phantom Stock which amounts to poop…god bless American greedy wannabe corporations who learn from the greediest)

    Look like Compass is buying talent… hope this works out in the long run…doubt it.

  • free agents

    everyone is a free agent in this business. maybe if corcoran offered more compelling reasons to stay, it wouldnt be so easy for compass to poach their top brass. i hope they go out and break up the cartel in the hamptons too.

  • Pat Pete

    EVERYONE MUST READ THE COMPLAINT, or your comments are not valid!

    Any sane person would see what Brennan and Martinez did was not ethical. Any employer including Compass would have sued.

    • comment flagged

      since when are commission-only independent contractors “employees”?

      • Pat Pete

        Since you obviously have not read the complaint. Martinez and Brennan are NOT contractors. They are employees!!!

        • comment flagged

          you’re right. I just finished reading the complaint. Keep fighting the good fight against internet commenters like me.

  • Tyrannosaurus Rex

    As much as I’d like to believe this case is frivolous and self-serving, if the defendants unlawfully downloaded documents that were not theirs to take, then they are really no different than Edward Snowden or Julian Assange and should be prosecuted, tried and convicted to the fullest extent of the law!

  • Lockout

    Why isnt anyone talking about the Elliman/Town lockout? That has been going on for a while. How are these brokerages are able to control independent contractors.

    • Pat Pete

      This has nothing to do with independent contractors. Read the complaint. This is two employees (Martinez and Brennan) who broke contracts they signed and the proceeded to do unethical things over and over. That is why Corcoran is suing.

      As owners, agents and brokers would you let someone out of a contract without punishment. EXACTLY!

      • Lockout

        Big deal, the agents downloaded some of their own listings, thats cause to sue them? The managers are a different story.

        • Pat Pete

          Agreed on the agent front but Brennan and Martinez might be in some trouble.

  • Mr. Ronen

    WORKERS/AGENTS LIE AND GET PROMOTION: We all read the complaint and the exhibits/affidavits. Total fabrication and frivolous affidavits!
    We have seen it before, the company workers always submit a signed fabricated affidavits and LIE FOR THE COMPANY, in return the company gives them HUGE PROMOTION! Sounds familiar???

  • artd

    Well, well,well, Corcoran has nothing better to do as the firm is slowly losing agents and leaving from all offices and not only going to Compass because Corcoran does not support or care about their agents and management is a mess…starting @ the top corporate level…it’s a girls group as my friend calls it who works their still for now A SORORITY! Corcoran is still operating the same “OLD” way but not the Barbara better Corcoran way…day to day as they are a brand that is still powerful but slowly losing its panache as agents are finding the new attraction and change for the better @ the so-called technology driven and real estate forward thinking ~ Compass.
    Yes, Compass is offering a lot to most of their agents, managers, staff and not just a salary or signing bonus. My questions is: how long can Compass continue to buy people with these measures when the firm is still finding a place in the nyc real estate world? Also, they have a staff close to 100 and still hiring (35 jobs are available in NYC according to their site) and no other firms has that or could afford to support that! Agents are not employees so they can go anywhere and do whatever they please and Compass is on a majorly hiring across the board and that leaves everyone wondering still what is Compass all about?

    • Bob the Broker

      All the corporate leads to go the Sorority and the pretty boys whom Pam loves. Compass is not the only firm benefiting from Pam’s backward way of thinking, BHS, Halstead and Town are doing well too. Pam is too busy looking over her shoulder trying to see what Elliman is doing instead of innovating and running a good company like Barbara used to do. In addition, you have to bring in more $$$ to keep any decent split than any other company in the city. Pam, stop peeing on my head and telling me it’s raining.

  • Victim of Corcoran raiding

    ,,,the chickens come home to roost…

  • Barbie

    This is a Karma – What Goes Around Comes Around: Corcoran invented this, they did it to other companies for decades, now others doing the same thing to Corcoran. Corcoran is a SINKING SHIP! EXODUS – WOW 51 Corcoran agents left in one week, what a surprise… :-)

  • Robert Reffkin

    Look– to all those haters. We’re playing to win. I don’t give two f**ks about corcoran.