Real Estate

RE/MAX And eXp Realty Settle Their Recruitment Lawsuit

RE/MAX had sued eXp Realty earlier this year over claims the latter company improperly solicited RE/MAX franchisees, and that it misrepresented RE/MAX’s commission splits.

Three months after RE/MAX sued eXp Realty over alleged improper recruitment and advertising efforts, the two big-name companies have settled the dispute before it went all the way to trial.

Documents filed in U.S. District court show that the two companies first reached an agreement to dismiss the case in late July. A judge then officially terminated the case Friday. The court documents do not include details about the agreement between the companies, but in a statement to Inman eXp CEO Jason Gesing described the outcome as “an amicable resolution.”

Jason Gesing

“As we anticipated, the resolution does not involve the exchange of money or an injunction,”  Gesing added. “We remain confident in the eXp Realty business model which continues to gain global market share.”

RE/MAX did not immediately respond to Inman’s request for comment and neither company has publicly released further details about the resolution.

RE/MAX first filed the lawsuit in May. At the time, the Colorado-based franchisor argued that it had “binding franchise agreements with franchisees,” but eXp nevertheless “targets franchise owners to abandon their franchises.” In other words, the suit argued that eXp was trying to recruit people who could not legally be recruited.

The suit mentioned instances from 2019 and 2020 in which it said eXp tried to lure away franchisees in Texas, Missouri, Nevada, Michigan, California, Pennsylvania and South Carolina.

In addition to recruiting, RE/MAX also took issue in the suit with eXp’s advertising. It specifically claimed that eXp “published false and misleading information” about RE/MAX commission splits and caps. The suit ultimately claimed that this was “irreparably harming” RE/MAX and amounted to a “repeated, malicious, and intentional pattern of interference.”

For it’s part, eXp eventually responded to those allegations with it’s own court filing, saying among other things that RE/MAX “has failed to establish any real or imminent threat.”

“The record is devoid of any evidence, or even specific factual allegations, suggesting that eXp has improperly interfered with any of RE/MAX’s franchise agreements,” the court documents continued.

The two companies ultimately resolved the dispute with unusual haste, while many other similar industry suits over other companies’ recruiting and advertising practices are still active. Most notably, Compass is facing lawsuits from multiple firms, including Realogy, the Agency and others. The Realogy suit is now more than three years old.

Those various lawsuits are still making their way through the courts. But in the meantime they highlight the intensely competitive industry landscape when it comes to attracting top-producing agents and winning market share — both high priorities for younger companies such as Compass and eXp.

Email Jim Dalrymple II

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