Corcoran sues Compass for “brazenly” raiding its talent pool

Brokerage accuses startup of unfair tactics; seeks restraining order

Mar.March 24, 2015 02:15 PM

From the New York website: The Corcoran Group, which has been hemorrhaging agents to startup brokerage Compass in recent months, slammed the rival brokerage with a lawsuit alleging it “brazenly and intentionally” raided key Corcoran offices, including a move to Corcoran’s Miami office. 

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.)

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.

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