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Keller Williams settles the Sitzer/Burnett commission lawsuit for $70 million

The settlement agreement is nationwide, but only involves the Sitzer/Burnett plaintiffs

Keller Williams has decided to bow out of the Sitzer/Burnett commission lawsuit. On Thursday, the Gary Keller-helmed brokerage notified the federal court in Missouri that it had entered into a settlement agreement with the plaintiffs in the Sitzer/Burnett suit. The settlement settles all home seller lawsuits nationwide.

According to Keller Williams spokesperson Darryl Frost, the firm will pay $70 million as part of the settlement agreement.

“This will not impact our operations or our ability to support our franchisees and agents,” Frost added in his email.

The settlement agreement also involved the plaintiffs in the Nosalek and Moehrl commission lawsuits, which includes Daniel Umpa, the only named plaintiff in the Umpa suit.

In an email sent to Keller Williams leaders, agents and associates, Keller wrote that he was “relieved to share that we have negotiated a nationwide settlement of the Sitzer/Burnett case.”

Keller also told members of the firm that the settlement “releases individual agents and franchisees from copycat litigation filed in the wake of Sitzer/Burnett.”

Like the Anywhere and RE/MAX settlements in the Sitzer/Burnett, Moehrl and Nosalek suits, Keller Williams’ settlement includes provisions to no longer require agents to be members of the National Association of Realtors or follow NAR’s Code of Ethics or the MLS Handbook, as well as practice changes, including that the firm will require or encourage agents to make it clear to clients that commissions are negotiable, that agents will have the freedom to set or negotiate commissions as they see fit, and that agents will not be required to make offers of compensation or accept offers of compensation from cooperating brokers.

Anywhere’s and RE/MAX’s settlement agreements in the Sitzer/Burnett, Nosalek and Moehrl suits have received preliminary approval from Judge Stephen Bough, who over saw the Sitzer/Burnett trial. A final approval hearing for the two settlements has been set for May 9, 2024.

According to Keller’s email, the firm decided to enter into a settlement due to the speculation and uncertainty across the industry in the wake of the jury verdict in the Sitzer/Burnett suit.

“We had full confidence in the strength of our appeal. But we also knew the appellate process could be long and unpredictable – and that our franchisees and agents would have no protection and complete uncertainty while that process played out over time. Our Keller Williams family needs and deserves protection now, not later,” Keller wrote.

“We came to the decision to settle with careful consideration for the immediate and long-term well-being of our agents, our franchisees, and the business models they depend on. It was a decision to bring stability, relief, and the freedom for us all to focus on our mission without distractions. It allows us all to turn our attention back to what we do best: delivering unparalleled value in an ever-evolving real estate market,” he added.

The HomeServices of America and the NAR are the only remaining defendants in the suit Moehrl and Sitzer/Burnett suits, while HomeServices of America and MLS PIN, which has been trying to negotiate its own settlement, remain in the Nosalek suit.

In late October 2023, an eight-person jury in Missouri found Keller Williams, along with defendants, NAR and HomeServices of America, liable for colluding to artificially inflate real estate agent commissions. The jury awarded full damaged of $1.7 billion, which under federal antitrust rules is trebled to over $5 billion.

Central to the Sitzer/Burnett suit, as well as the other commission lawsuits, in NAR’s Participation Rule, which requires listing agents to make a blanket offer of compensation to buyers’ agents in order to list the property on a realtor-affiliated multiple listing service (MLS). According to the plaintiffs, commission sharing inflates the costs for consumers, in violation of the Sherman Antitrust Act.

“In order to best protect the RE/MAX network, we entered into a settlement in September 2023. Our focus remains on the final approval of the RE/MAX settlement, and we don’t anticipate any deviation from our path to a timely resolution,” a RE/MAX spokesperson wrote in an email. “As previously stated, we were not a participant in the trial. RE/MAX, LLC is well positioned to support the RE/MAX network moving forward and to continue our position as a leader in the real estate industry. Our focus remains on the needs of RE/MAX franchisees and agents and supporting them in delivering the best customer experience for homebuyers and sellers.”

NAR, Anywhere and the counsel for the Sitzer/Burnett plaintiffs have not yet returned a request for comment. HomeServices of America did not wish to comment.

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