In the lawsuit against Engel & Volkers, what is the primary antitrust conspiracy alleged by the plaintiffs?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
the United States District Court for the Western District of Missouri, Western Division. On April 23, 2024 plaintiffs filed a consolidated class action complaint against us and the above named defendants claiming an antitrust conspiracy by and between the National Association of Realtors® ("NAR") and residential real estate brokerages to increase broker compensation at the expense of property sellers. Plaintiffs are alleging that a NAR rule that requires brokers to make a blanket, non-negotiable offer of buyer broker compensation when listing a property, results in increased cost to sellers, artificially inflates buyer broker's compensation and incentivizes buyer brokers to steer buyers toward higher commissioned properties, not disclosing buyer broker compensation to buyers while curtailing competition, all in violation of federal antitrust law, state antitrust law and state deceptive trade practices and fair trade practices laws. Similarly, Plaintiffs allege that the rules of other associations and listing services contribute to these anticompetitive effects on commissions. Plaintiffs further allege that certain defendants, including us, use their agreements with franchisees to require adherence to the NAR and other rules in violation of federal antitrust law. Plaintiffs seek class action certification. Plaintiffs further seek injunctive and equitable relief and damages and/or restitution for the class period of December 27, 2019 until present in an unspecified amount to be proved at trial. Although we vigorously dispute Plaintiffs' allegations, we agreed to settle the case on June 18, 2024 and entered into a settlement agreement dated July 12, 2024 ("Settlement Agreement") that includes a total monetary settlement amount of $6.9 million to be paid by us into the qualified settlement fund. The Settlement Agreement received final approval from the court on November 4, 2024. Objectors to the settlement filed four separate appeals: Don Gibson, et al v. Monty March, 24-3478 (8th Cir.); Don Gibson, et al v. Robert Friedman, et al, 24-3481 (8th Cir.); Don Gibson, et al v. James Mullis, 24-3473 (8th Cir.); and Don Gibson, et al v. Benny Cheatham, et al, 24-3564 (8th Cir.). The Settlement Agree
Source: Item 3 — LITIGATION (FDD pages 17–21)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, the plaintiffs in a consolidated class action complaint allege an antitrust conspiracy. The suit claims that the National Association of Realtors (NAR) and residential real estate brokerages conspired to increase broker compensation at the expense of property sellers.
The plaintiffs specifically allege that a NAR rule requiring brokers to make a blanket, non-negotiable offer of buyer broker compensation when listing a property results in increased costs to sellers. This allegedly inflates buyer broker compensation, incentivizes buyer brokers to steer buyers toward higher-commissioned properties, and curtails competition by not disclosing buyer broker compensation to buyers. The plaintiffs contend that these actions violate federal antitrust law, state antitrust law, and state deceptive trade practices and fair trade practices laws.
The plaintiffs further claim that Engel & Volkers, along with other defendants, use their agreements with franchisees to enforce adherence to NAR and other rules, which they allege is a violation of federal antitrust law. The plaintiffs are seeking class action certification, injunctive and equitable relief, and damages and/or restitution for the period from December 27, 2019, to the present, with the amount to be determined at trial. Engel & Volkers settled the case on June 18, 2024, agreeing to a $6.9 million settlement, which received final court approval on November 4, 2024, but is subject to appeals.