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Politics & MoneyReal EstateFintech

Compass, Zillow reach settlement in poaching lawsuits

Quietly settle case accusing Compass of stealing employees, trade secrets

On the same day Compass was slapped with a bombshell lawsuit from rival Realogy accusing it of unfair business practices and illegal scheming, the real estate heavyweight settled a pair of lawsuits with another competitor, Zillow Group.

As GeekWire first reported, the two companies came to an agreement in federal court Wednesday that dismissed the two suits with prejudice, meaning Zillow cannot refile the claim down the road. No other specifics of the settlement were revealed.

Originally filed in Washington state court and federal court in April, the lawsuits accuse Compass of poaching three Zillow employees, encouraging them to break their non-competes with the company, and then extracting confidential, proprietary information from those employees, including sales data, customer lists and technical information.

The employees named in the suit were Zillow’s former head of machine learning, a software engineer and a sales executive. All three had 12-month non-compete and non-disclosure contracts in place.

The suits alleged that Compass poached those employees in bid to build up its newly launched engineering hub in Seattle, a move Zillow said was designed specifically to compete with its own tech-focused efforts in the home-buying sector.

The suits also stated that Compass has a long history of unlawful poaching of its competitors’ employees.

This is something that was also mentioned in Realogy’s suit, as the brokerage alleged that Compass routinely poaches employees and agents from its competition by grossly overpaying them, then encourages them to breach their non-competes and divulge confidential information learned in their previous jobs.

It seems Compass was ready move past the Zillow suits so it could focus instead on Realogy’s claims, no doubt racking up serious legal bills in the process.

Zillow said it was satisfied with the agreement.

“We are pleased to have reached an agreement with Compass that allows Zillow Group to continue our work streamlining real estate transactions for consumers in a fair, competitive environment,” a spokesperson told HousingWire.

A Compass spokesperson said the company looks forward to working with Zillow to improve the real estate industry.

“Compass and Zillow share common goals, to improve the real estate industry for consumers and agents,” the Compass spokesperson told HousingWire. “The two companies have agreed to resolve their differences and look forward to working together to help the entire real estate ecosystem.”

 

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