The Real Deal New York

Saunders sued Meg Salem for data theft. Now, the brokerage is playing defense

Hamptons firm sued Compass, too, but settled in 2016
By E.B. Solomont | February 12, 2018 04:30PM

From left: Andrew Saunders, Meg Salem and Robert Reffkin

Back in 2015, Hamptons-based Saunders & Associates came out swinging when former agent Meg Salem joined Compass. In a lawsuit filed in December of that year, the firm, founded by Andrew Saunders, accused Salem and Compass of conspiring to access its password-protected network to steal listings and other proprietary data.

But as jury selection for the case kicks off in federal court in Islip today, Saunders is facing allegations that it built its own business by copying open listings from other firms’ websites. And Salem — the sole defendant left in the case — is seeking $5 million in unpaid commission and damages for being “blacklisted” in the Hamptons market.

Court records show the case began to turn in May 2016, when Compass filed a third-party complaint “to place blame where it belongs.” (Days after being sued in 2015, the firm showed Salem the door.)

In the May 2016 court documents, Compass accused Andrew Saunders of using his former agents and staffers to “blunt” Compass’ success. “In a plotline borrowed from daytime television,” Compass alleged, Saunders dropped the charges against Salem’s former teammates Vanessa Bogan, Jesse Spooner and Jessica Grainger-Rozzi in exchange for favorable testimony.

By November 2016, Saunders did, in fact, drop its claims against Compass, Bogan, Spooner and Grainger-Rozzi — leaving Salem as the sole defendant. Salem is also the subject of a complaint — filed by Saunders — with the New York Department of State.

But in a July 2016 letter to the DOS, Salem’s attorney, Robert Folks, alleged that Andrew Saunders admitted during a phone conversation to incorporating open listings into his firm’s database. “That Saunders has, historically and deliberately, taken open real estate listings from its competitors when new real estate salespersons join Saunders further evidences the disingenuous nature of the Complaint,” he wrote.

Folks made the same argument in Salem’s February 2017 counterclaim, filed with the court. In the counterclaim, Salem alleged that Saunders launched a campaign to “blacklist” her from the Hamptons real estate market — even though he “engaged in the exact same and even more egregious conduct” when launching his eponymous firm in 2008.

In court documents, Salem said she is seeking $5 million in damages, including $429,777 in unpaid commission and damages. “The scorched-earth approach” by Saunders, Salem’s lawyers argued, was designed to wear her down emotionally “both as a form of revenge and a vehicle to force Ms. Salem to leave the industry.”

To back up the claim, Salem’s legal team included Gary Nolan — Saunders’ former No. 2 — on its witness list. Nolan, former senior vice president of business development, left the firm in November. “We wish him the best,” Andrew Saunders told The Real Deal at the time.

As recently as last week, however, Salem’s lawyer, Robert Folks, informed the court that they could not locate Nolan in order to serve him with a subpoena.