Settling ahead of trial a prudent choice for Anywhere, RE/MAX
With more trials over commission practices — and potentially hefty damage awards — looming, the settlement agreements could be a selling point.
With the Sitzer/Burnett jury finding in favor of the plaintiffs on Oct. 31 — and awarding nearly $1.8 billion in damages — it would seem that the defendants who previously agreed to settle made a good choice.
Before the trial in the agent commissions case began on Oct. 16, RE/MAX and Anywhere reached settlements with the plaintiffs that included monetary damages and agreements to change their compensation policies. RE/MAX agreed to pay $55 million to the plaintiffs, while Anywhere settled for $83.5 million. The agreements do not include an admission of wrongdoing.
Both settlements still need to be approved by Judge Stephen Bough in the U.S. District Court in Kansas City; it is unclear when that will happen.
The settlement agreements apply to not only the Sitzer/Burnett case in Missouri, but also the Moehrl case in Illinois and, more recently, the Nosalek case in Massachusetts. The Moehrl and Nosalek lawsuits have not yet gone to trial; when they do — barring settlements from the remaining defendants — the outcomes could result in additional, hefty damage awards.
The National Association of Realtors, HomeServices of America and Keller Williams are defendants in the Moehrl case, while HomeServices and KW are the two defendants in the Nosalek case.
Through a spokesperson, Anywhere acknowledged that it was pleased to have entered into a nationwide agreement. The company added that it strongly believes in the value of both buyer and seller agents and remains committed to supporting all agents.
"The jury verdict, while disappointing, does not alter our settlement, and we look forward to obtaining court approval and implementing our settlement agreement," the statement read.
In its own statement, RE/MAX would only say that the settlement is still subject to the court's approval, "which we expect to be forthcoming."
Industry observers Rob Hahn and Greg Robertson said during a live reaction video on Tuesday that the verdict could end up being a "boon" for RE/MAX and Anywhere. "New agents will start looking at them because they're covered," Robertson said. Meanwhile, said Hahn, franchisees for the remaining defendants may have the opposite reaction and consider jumping ship.