The battle between the Corcoran Group and Compass just got uglier.
Under fire for allegedly poaching agents, Compass is now accusing Corcoran of launching a smear campaign against its former agents, and in doing so, hurting their business and delivering a “thinly veiled threat” to others considering a move to Compass, according to counterclaims filed April 20 in New York Supreme Court.
“Compass will no longer tolerate Corcoran’s bullying and unlawful tactics,” Compass stated in court documents. “Through its scare tactics, [Corcoran’s parent company] NRT has sought not only to damage Compass’ reputation, but also to punish and harass its own former real estate agents.”
The counterclaims were filed in response to Corcoran’s March 23 lawsuit, in which the brokerage accused Compass of “brazenly and intentionally” raiding key Corcoran offices and using “unlawful methods” to recruit agents and managers.
Corcoran’s suit named former managers Gene Martinez and Patrick Brennan, as well as former agents MaryAnne Farrell, Debra Bondy and Claire McFeely, accusing the five of breaking noncompete agreements and stealing trade secrets from Corcoran when they defected to Compass. In its suit, Corcoran, which is led by CEO Pam Liebman, also sought a restraining order against Martinez, the firm’s former Soho sales manager, but a judge denied the motion, stating, “There is not a chance in hell that I would issue that TRO.”
Compass now accuses Corcoran of waging a crusade against its former employees in an attempt to stop agents from leaving the firm. “Unable to hold onto its agents, Corcoran now seeks to vilify them,” Compass claims.
Led by CEO Robert Reffkin, Compass – which launched in 2013 and is backed by $70 million from investors – has recruited nearly 60 agents from Corcoran, according to Compass’ calculations.
In a statement, Corcoran said that it, too, began as a small firm at a time when the industry was dominated by larger and more established companies. Last year, the firm had $18.5 billion in sales, the firm said.
“We support any company’s right to develop and grow its business, subject to the standards of fair and legal play. Contractual agreements between a company and its employees and agents must be upheld,” Corcoran said. “Agents are our most important asset and Corcoran prides itself on its professional and respectful relationships with its independent agents and we reject any claims to the contrary.”
But in its counterclaims, Compass says Corcoran has withheld commissions from former agents and publicized personal and damaging information about former employees. Further, Corcoran is “spreading malicious rumors in order to prevent” its employees and agents from leaving, Compass alleges in court documents.
Compass’ counterclaims allege that Corcoran breached a non-disclosure agreement with Martinez, and “maliciously published” his employment contract and salary information in its lawsuit. Details of the contract were reported by The Real Deal, but the document was subsequently sealed.
Compass further argues that Corcoran retaliated against former agents Farrell and Bondy by stopping all efforts to market their listings and avoid paying them commission.
“Due to Corcoran’s persistent intimidation tactics,” Compass’ suit claims, “certain Corcoran agents have discontinued discussions surrounding possible affiliation with Compass out of fear of retaliation by Corcoran.”