Keller Williams Faces New Class-Action Lawsuit Over Profit-Sharing Program Changes

Keller Williams, one of the largest national real estate brokerage, has been named in yet another class-action lawsuit because of recent changes made to its profit-sharing program. The lawsuit, that was filed on Thursday, joins a series of legal challenges the company has faced over alterations to its compensation policies to it’s agents.

What’s This Lawsuit All about?

The lawsuit was initiated by Louis Ronayne and Deborah Ronayne in the U.S. District Court for the Eastern District of Michigan, they are seeking class-action status against Keller Williams. Louis Ronayne had a long career as an agent at Keller Williams, he started as an agent in July 2000 and later becoming a team leader and regional director. Deborah Ronayne also served as an agent from November 2002 until September 2014. They, along with other former agents, contest the adjustments made to the brokerage’s profit-sharing terms.

What are These Recent Changes to the Profit-Sharing Policy at KW?

Well, in February 2020, Keller Williams implemented a more restrictive policy on its profit-sharing program. The policy adjustments included:

• New Eligibility Requirements: Associates joining after April 1, 2020, who move to a competitor lose their revenue from the lifelong revenue program, although this did not affect agents who joined before this date.
• Extended Vesting Period: The wait period to become a vested member was lengthened.
• Significant Reduction in Profit Share: During an August 2023 event, the International Associate Leadership Council revised the profit-sharing distribution policy. Now, vested agents who joined before April 1, 2020, and actively compete with KW brokerages will see their profit share reduced from 100% to 5%. That is a huge change, huge!

However, an incentive remains for agents to return to Keller Williams. According to an email from the then KW President Marc King, former agents who rejoin the company within six months can have their profit share restored to 100%. Additionally, those who have retired or left the industry will retain their full profit-share distribution.

Legal Claims Against Keller Williams in The Lawsuit:

The plaintiffs say that Keller Williams breached its own policies and guidelines by:

• Unlawfully Terminating Benefits: They claim that the brokerage had no right to terminate the profit-share program outright. But yet they did..
• Improper Amendments: They allege that the company improperly amended the method of calculating the profit-sharing contributions and distributions without proper authorization.
• Retroactive Changes: The plaintiffs contend that any amendments to the profit-sharing program were only allowed to be prospective, not retroactive.

Conclusion and Upcoming Changes

The outcome of this lawsuit could significantly impact Keller Williams’ operations and its relationship with current and former agents. The new policy is set to be implemented by July 1, 2024, which may lead to further disputes if not handled carefully.

Key Points to About The Keller Williams Lawsuit (I know hard to keep up sometimes):

1. Keller Williams is facing a new class-action lawsuit over its profit-sharing program.
2. The Ronaynes filed the lawsuit seeking class-action status to represent affected agents.
3. Changes in 2020 introduced more restrictive conditions for new agents.
4. Significant policy adjustments were made in 2023, reducing profit shares from 100% to 5% for competing agents.
5. Agents returning to Keller Williams within six months can restore their profit shares to 100%.
6. Retired or non-competing former agents retain full profit-share benefits.
7. The lawsuit claims KW lacked authority to terminate or amend the profit-sharing program.
8. Amendments to the profit-sharing program should only be prospective, not retroactive.
9. The legal challenge adds to a series of class-action lawsuits faced by Keller Williams.
10. The resolution of these disputes will be crucial for Keller Williams’ future agent relations and policy structuring.

Chloe Hill

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