Keller Williams announced this afternoon that it has settled the Burnett class-action lawsuit months after the trial concluded and a jury found the company had illegally conspired to inflate commissions (along with HomeServices and the National Association of REALTORS®), with co-founder Gary Keller claiming that the company negotiated terms that “protect our agents, our franchisees, and our industry.”
“We had full confidence in the strength of our appeal,” wrote Keller in a letter shared with company agents and provided to RISMedia. “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.”
A Keller Williams spokesperson said the settlement “will not impact our operations or our ability to support our franchisees and agents.”
The surprising announcement comes as the other two defendants in Burnett have vowed to continue the fight to overturn a $1.8 billion jury verdict handed down in October.
A representative of HomeServices said the company had not yet had the chance to review the settlement, and did not have any immediate comment. An emailed request for comment sent to NAR was not immediately returned.
A copy of the agreement provided to RISMedia appeared to largely mirror the terms RE/MAX and Anywhere agreed to when they forged settlements ahead of the Burnett trial—and the $70 million price tag is roughly on par with what those companies agreed to pay. It also explicitly includes claims made in at least two other lawsuits—Moerhl and MLS Pin, also similar to the RE/MAX and Anywhere settlements.
As part of the settlement, Keller Williams promised to encourage their agents and franchises to be “transparent” about compensation and disclosing commission structure. The company also cannot provide software that allows agents to filter listings by compensation offer, and “not express or imply a minimum commission requirement in franchise agreements, training materials or other policies.”
Keller Williams will also no longer require membership in NAR, or for franchises to follow the NAR Code of Ethics or MLS Handbook.
In his letter to the company’s agents and franchise, Keller described the choice to settle as a “launchpad,” and called on agents and franchises to focus on their core business and values.
“This ethos is at the core of our business, allowing agents the freedom to manage their businesses, set their service fees, and negotiate compensation with clients independently. That was true before these lawsuits, it was true at trial, and it remains true as we put this settlement behind us,” he wrote.
This is a developing story. Check back with RISMedia for updates.
