Compass, Realogy Debate Merits Of Arbitration

To arbitrate or not arbitrate, that is the question.

For eight months, Realogy and Compass have been trading barbs in a wide-ranging suit over illicit business practices and predatory poaching. But whether or not the two brokerage giants enter arbitration is the latest battleground in their legal war.

Compass in November asked the court for a stay of legal proceedings and to instead require the companies to settle matters out of court, a Real Estate Board of New York requirement for member disputes. The SoftBank-backed brokerage argued that it’s a member of REBNY, as is Realogy subsidiary the Corcoran Group.

But in a March 4 letter to Judge Barry Ostrager, Realogy’s attorney argued that neither firm fits the description of members who are required to enter arbitration.

REBNY’s constitution limits arbitration to “Broker A” members, or individuals who are licensed brokers, according to REBNY’s website. A company principal would be a Broker A, for example.

“Under Defendants’ theory, New York brokerages would be required to arbitrate slip-and-fall, carcrash, or anti-trust cases — or anything else under the sun,” Realogy’s attorney wrote. “That is obviously absurd.”

Compass, meanwhile, argued that its and Corcoran’s affiliations with Broker A members should be enough.

“Firms like Corcoran have a designated senior officer who serves as the firm’s representative Broker A member,” Compass’ lawyer wrote. What’s more, the attorney said, “Matters concerning the treatment of exclusive listing agreements are core REBNY issues that fall within the heartland of a REBNY arbitrator’s expertise.”
Neither brokerage immediately responded to requests for comment.
In recent weeks, Compass and Realogy have told the court they are at an “impasse” over discovery in the suit, which Realogy filed in July.

In its original complaint, Realogy accused Compass of illicit business practices and predatory poaching, and alleged the firm’s CEO, Robert Reffkin, made attempts at price-fixing. Compass later said the suit was an act of desperation, and released a statement claiming that Realogy CEO Ryan Schneider spoke to Reffkin about selling the company.

Most recently, the firms have accused each other of withholding files and/or witnesses in the case.
In a February 24 letter to the judge, lawyers for Compass argued that amid the legal battle, top agent Charlie Attias, who left Corcoran in September 2019, became the victim of “abusive” and “overbroad” requests for information with the intent to harass and embarrass him. Realogy, meanwhile, alleged Compass interfered with exclusive listing agreements, and it said Attias was improperly recruited — something the agent’s attorney flatly denied.