{"id":2906,"date":"2022-03-03T22:01:00","date_gmt":"2022-03-03T22:01:00","guid":{"rendered":"https:\/\/preprod.realtrends.com\/blog\/2022\/03\/03\/broker-fires-back-in-re-max-predatory-recruiting-saga\/"},"modified":"2025-03-13T02:40:45","modified_gmt":"2025-03-13T02:40:45","slug":"broker-fires-back-in-re-max-predatory-recruiting-saga","status":"publish","type":"post","link":"https:\/\/preprod.realtrends.com\/blog\/2022\/03\/03\/broker-fires-back-in-re-max-predatory-recruiting-saga\/","title":{"rendered":"Broker fires back in RE\/MAX \u2018predatory recruiting\u2019 saga"},"content":{"rendered":"\n<p>After filing a <a href=\"https:\/\/www.inman.com\/2021\/08\/26\/re-max-sues-its-own-broker-for-allegedly-recruiting-41-agents-to-exp\/\" target=\"_blank\" rel=\"noreferrer noopener\">suit<\/a> in August that alleged a real estate broker had violated <strong>RE\/MAX\u2019s<\/strong> predatory recruiting policy in its franchise agreement, the broker filed a <a href=\"https:\/\/webassets.inman.com\/wp-content\/uploads\/2022\/03\/Amended_ANSWER_to_19_Amended_Complaint_COUNTERCLAIMS_02252022.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">countersuit<\/a> in federal court on Friday claiming, among other things, that RE\/MAX has violated the same policy.<\/p>\n\n\n\n<p>In the original complaint, RE\/MAX sued broker Jimmy Dulin and his Carmel, Indiana-based company, <strong>The Hamilton Group<\/strong>, of <strong>RE\/MAX Ability Plus<\/strong> (REAB), for allegedly violating the terms of four franchise agreements for RE\/MAX offices in Indiana by recruiting 41 agents to <strong>eXp Realty<\/strong> while still under contract with RE\/MAX. According to the complaint, Dulin and seven members of the REAB management team held their annual company retreat in Arizona in April 2021. While in Arizona, RE\/MAX alleges that Dulin and his team met with eXp agents Chuck and Angel Fazio. During the meeting RE\/MAX alleges that Dulin asked his team to commit to joining eXp.<\/p>\n\n\n\n<p>According to the complaint, if Dulin moved to eXp and named one of the Fazios as his eXp sponsor and then one of Dulin\u2019s associates joined and named Dulin as their sponsor, then both the Fazios and Dulin would be compensated under eXp\u2019s revenue share plan.<\/p>\n\n\n\n<p>However, citing the sworn testimony of eXp\u2019s head of U.S. growth, Dave Conord, the complaint claimed that Dulin told eXp that he was interested in joining eXp with his team, but eXp told Dulin that he could not because he remained under contract with RE\/MAX.<\/p>\n\n\n\n<p>Inman News first reported on the countersuit.<\/p>\n\n\n\n<p>According to the countersuit, RE\/MAX requires its franchisees to enter into separate franchise agreements for each office they open, even if the brokerage functions as a single business. This means that each office location has a different franchise termination date. Attorneys for Dulin stated in the filing that a Massachusetts court found that this policy <a href=\"https:\/\/www.inman.com\/2020\/04\/24\/judge-awards-leading-edge-damages-attorneys-fees-in-lawsuit-with-re-max-integra\/#:~:text=In%20a%2071%2Dpage%20decision,Koniewski%20said%20in%20a%20statement.\" target=\"_blank\" rel=\"noreferrer noopener\">exists in<\/a> Leading Edge vs. RE\/MAX.<\/p>\n\n\n\n<p>\u201cRE\/MAX has an undisclosed policy of refusing to allow owners of multiple locations with Franchise Agreements on staggered terms like REAB to have a coterminous expiration date for all locations because those owners might choose to leave the RE\/MAX network upon the expiration of their Franchise Agreements,\u201d Dulin\u2019s attorneys wrote in the filing.<\/p>\n\n\n\n<p>According to the countersuit, this, plus the noncompete provision in RE\/MAX\u2019s franchise agreement prohibiting brokers or their immediate family members from competing with RE\/MAX by opening a non-RE\/MAX brokerage during the term of any franchise agreement, turns the agreements into \u201cperpetual agreements\u201d instead of the five-year terms they supposedly are.<\/p>\n\n\n\n<p>The countersuit goes on to claim that RE\/MAX uses this to \u201cdictate increasingly onerous and anticompetitive terms on multi-point franchises like REAB,\u201d and that Dulin and REAB \u201care left to choose between systematically closing their offices one-by-one and destroying the value of 30 years of hard work or acquiescing to the increasingly unreasonable terms dictated by RE\/MAX.\u201d<\/p>\n\n\n\n<p>As an example of this practice, the countersuit alleges that Dulin and RE\/MAX mutually agreed to close REAB\u2019s office in Lebanon, Indiana, without extending the term of any other franchise location,&nbsp;but RE\/MAX has since claimed that Dulin and REAB can only close that office if they agree to extend the term of REAB\u2019s office in Carmel, Indiana.<\/p>\n\n\n\n<p>By closing the Lebanon office and not extending the term of the Carmel office, RE\/MAX claims that Dulin breached his contract.<\/p>\n\n\n\n<p>In the countersuit, Dulin asks the court to declare that the Lebanon agreement has been terminated and that the Carmel office\u2019s term was not extended. The filing also asks that the court declare RE\/MAX\u2019s noncompete clauses invalid and unenforceable, and to find the staggered terms of the franchise agreements represents a restraint of trade and unfair practices.<\/p>\n\n\n\n<p>\u201cRE\/MAX makes it nearly impossible for its franchisees to compete against RE\/MAX in the future, whether as an independent business or with a different franchise,\u201d the countersuit said. \u201cThe non-compete provisions, in combination with the staggered terms required by RE\/MAX, are unreasonable restraints on trade. The only basis for a non-compete is to protect confidential information, but \u2026 RE\/MAX never disclosed confidential information to the Counterclaim Plaintiffs during their long relationship, and therefore RE\/MAX cannot enforce any non-compete provision.\u201d<\/p>\n\n\n\n<p>In addition, the countersuit alleges that RE\/MAX breached its own contract and engaged in tortious (wrongful) interference with a contract by taking part in and encouraging \u201cthe predatory recruiting and poaching of REAB\u2019s sales agents,\u201d in violation of its own predatory recruiting policy and interfering with Dulin\u2019s contracts with the agents in questions, which Dulin\u2019s attorneys name in the filing.<\/p>\n\n\n\n<p>Due to this, the filing alleges that Dulin and REAB \u201clost valuable business relationship and they expect to suffer lost income and profits as a result of those lost relationships.\u201d<\/p>\n\n\n\n<p>The countersuit\u2019s final claim is that RE\/MAX improperly mixes funds from a monthly \u201cPromotion Fee\u201d and a monthly \u201cHot Air Balloon Fund Fee,\u201d which RE\/MAX\u2019s franchise agreements say are accounted for separately from the franchisor\u2019s other funds for advertising to benefit all of RE\/MAX offices in the region.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Indiana-based Jimmy Dulin filed a countersuit against RE\/MAX alleging the real estate franchisor allowed other RE\/MAX franchises to recruit away his agents.<\/p>\n","protected":false},"author":34740,"featured_media":4822,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3255],"tags":[],"coauthors":[1760],"class_list":["post-2906","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-archive"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.4 (Yoast SEO v26.8) - 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