Three former Newmark brokers who jumped ship to CBRE are fighting back against the enforcement of a non-compete agreement that they claim is destroying their careers.
Denver-based brokers Terrance Hunt, Christopher Cowan and Shane Ozment — who specialize in multifamily sales — are appealing an injunction issued by a New York judge in July that prevents the trio from providing brokerage services in Colorado for one year.
“There’s almost no injunction that’s more severe,” Theodore Boutrous, the attorney representing the brokers, told an appellate court during a Nov. 18 hearing.
The agreements in question were signed in 2014, when BGC Holdings, Newmark’s then-parent company, acquired Apartment Realty Advisors of Colorado, one of the region’s most prominent multifamily investment brokerages. Newmark spun off from BGC in 2018.
Hunt, Cowan and Ozment — who each owned a small share of Apartment Realty Advisors — signed agreements stating that they would not work for Newmark’s competitors nationwide for two years if they left the company before October 2021. If they left after that, the non-compete period would be reduced to one year. In exchange, the brokers collectively received $1.5 million for their shares when the acquisition was completed, Newmark claims.
Newmark sued the brokers in May, shortly after they decamped for CBRE, alleging breach of contract. CBRE was initially named as a co-defendant, but was later dropped.
The brokers countersued, alleging that they received only $142,000 each for selling their shares. In any event, Newmark made more than enough to cover the payment from the brokers’ deals during their six and a half years with the firm, they argued, asserting that the non-compete pact was unreasonable and was voided by a subsequent 2018 agreement with Apartment Realty Advisors.
New York state Supreme Court Justice Barry Ostrager ultimately upheld the non-compete with the preliminary injunction, though he shortened its term from two years to one, and shrank its geographical scope from nationwide to Colorado.
Cantor Fitzgerald’s David Paul, the attorney representing Newmark, told the appellate court that the fact that Ostrager modified the non-compete requirements in favor of the brokers “underscores that he exercised his discretion soundly and that there is no abuse of discretion in this case.”
Appellate judges typically render a decision in six to eight weeks.