Compass created “dummy job” to avoid Realogy finance exec’s non-compete: judge

Finance exec allegedly attended high-level meetings before jumping to Compass

TRD NATIONAL /
Sep.September 04, 2019 05:52 PM
Compass CEO Robert Reffkin and Realogy CEO Ryan Schneider

Compass CEO Robert Reffkin and Realogy CEO Ryan Schneider

Compass created a “dummy job” for a longtime Realogy finance executive last year in order to circumvent his non-compete, a New Jersey judge ruled.

At a hearing last month, Judge Maritza Berdote-Byrne said Realogy had provided “convincing evidence” that the SoftBank-backed firm hired Urvin Pandya even though doing so violated a non-compete with Realogy, according to a transcript for the August 14 court appearance obtained by The Real Deal.

According to the transcript, the judge cited an email exchange between Compass recruiters, in which they described Pandya’s new job as a “dummy job created by Finance to hire Urvin.”

She also cited a high-level meeting with Realogy executives that Pandya attended before he quit. He was present at the meeting, she said, knowing full well he was about to resign and take a job at Compass. “I do find that that’s proprietary information,” she said.

“We welcome the best talent to Compass everyday, but we never want confidential information from a prior employers,” a spokesperson for Compass said in a statement. “In fact, all employees are specifically instructed not to bring a previous employer’s confidential information or intellectual property to Compass and sign agreements affirming their understanding of those requirements.”

Compass created “dummy job” to avoid Realogy finance exec’s non-compete: judge

The ruling stems from a lawsuit Realogy filed in May, alleging Pandya stole privileged information from Realogy and shared it with Compass. Realogy also claimed Pandya violated his non-compete, which prevented him from working for a rival within 50 miles of Realogy’s New Jersey offices for six months. Officially, Pandya worked in Philadelphia but he reported to Compass’ CFO in Manhattan.

At an initial hearing in June, a New Jersey judge sidelined Pandya from his new job. She upheld that ruling at the August 14 hearing.

During the August court appearance, an attorney for Pandya and Compass disputed they violated Pandya’s non-compete.

“It’s not as if Compass is a company that just thumbs its nose at the non-compete,” he said.

The judge interrupted his argument. “The email attached… admits to creating this dummy position,” she said. “It’s not a smoking gun, but it’s about as close as you get.”

In justifying her decision, she said Compass was “complicit” in accepting privileged information that Pandya shared with brokerage executives. The firm “was very interested in hiring Mr. Pandya, so much so that they were creative in creating a position for Mr. Pandya, a dummy position, and then consciously discussing how to circumvent the 50-mile geographical restriction of the RCA by putting him in Philadelphia.”

The suit is separate from the wide-ranging lawsuit Realogy filed in July, in which it accused Compass of “predatory” poaching and unfair business practices, including attempts at price-fixing. Pandya is one of the examples in that suit, which claims he had “virtually unfettered access to Realogy’s confidential business information.”


Related Article

arrow_forward_ios
From left: Compass' Jason Post, CEO Robert Reffkin, and COO Maelle Gavet (Credit: Wharton UPenn)

Compass’ top communications exec to depart

Realogy CEO Ryan Schneider and Compass CEO Robert Reffkin

Compass says it rejected Realogy’s offer to sell

Realogy CEO Ryan Schneider (Credit: iStock)

Realogy’s stock drops below $5 per share

John Giannone and Jac Credaroli (Credit: iStock)

Two Elliman agents launch platform to provide renters, buyers and sellers up to $50K in unsecured loans

Realogy CEO Ryan Schneider (Credit: iStock)

Realogy stock soars 19% despite revenue slide

Compass CEO Robert Reffkin and CCO Matt Spangler (Credit: Getty Images and Compass)

Compass to ex-Uber staffers: Ride with us!

Compass Founder & CEO Robert Reffkin (Credit: Michael Toolan, iStock)

After $370M funding round, Compass back under IPO spotlight

From left: Robert Reffkin and Ori Allon (Credit: Compass)

Compass valued at $6.4B after Series G

arrow_forward_ios