The Real Deal New York

Modern Spaces slaps Compass with agent-poaching suit

Queens firm allege a former agent shared private data with rival
By E.B. Solomont | February 07, 2018 11:15AM

From left: Eric Benaim, Robert Reffkin and Jessica Meis

Compass’ plan to be the king of Queens may not come easy.

Three months into a massive national expansion, the brokerage was hit with a lawsuit on Tuesday by the residential firm Modern Spaces, which accused the startup of targeting its agents and stealing confidential data to gain a foothold in the borough. Rather than engage in lawful competition, the suit said, Compass’ “main corporate strategy appears to be willfully and unlawfully rely on undermining its competition.”

In its complaint, the Queens-centric firm said former agent Jessica Meis — who worked for Modern Spaces between November 2016 and January 2018 — had access to confidential information and data that she emailed to herself in the days before she joined Compass this year. That information ranged from private client information and listings to business strategies.

Compass later “blatantly” used marketing photographs owned by Modern Spaces on its website, according to the complaint.

In a statement, Modern Spaces, which launched in 2008 and currently has 100 agents, said it isn’t the first firm to “fall prey” to Compass. “In our case, certain Modern Spaces agents appear to have been used as tools by Compass, who allegedly supplied them with step-by-step instructions on how to steal proprietary company information and listings.”

On Wednesday, Compass forcefully denied those claims. “Compass has never been found liable by court of committing any of the allegations set forth in Modern Space’s complaint,” the company said in a statement.

The Manhattan-based brokerage — valued around $2.2 billion following a $450 million investment from SoftBank in December — was No. 4 on The Real Deal’s ranking of top residential firms this month, having closed $1.37 billion in sell-side deals in 2017. It ended last year with 713 Manhattan agents, up from 300 in 2016.

Compass currently has six offices in Manhattan and Brooklyn. CEO Robert Reffkin told TRD last month that the brokerage plans to double its office count for a total of 12 locations, including new territories like Bedford-Stuyvesant and Long Island City. It has recently hired six agents from Modern Spaces. Late last year, it tapped Silvette Julian from Nest Seekers International to help spearhead an expansion into Long Island City.

In the past, the venture-backed brokerage has faced several lawsuits from rivals, accusing Compass of stealing trade secrets and poaching agents. The Corcoran Group, for example, took Compass to court in 2015 after it said the firm “brazenly and intentionally” raided its offices. The suit was later settled.

Compass was also sued by the Hamptons brokerage Saunders & Associates, which alleged its former agent Meg Salem stole proprietary data and brought that data with her to Compass. Saunders ultimately dropped the case against Compass, which fired Salem within weeks of the lawsuit. The case between Salem and Saunders is ongoing.