Several accusations have been made in the past year since REX took aim at the National Association of REALTORS® (NAR) and Zillow. While they’ve mostly come out of the Texas-based real estate startup’s camp, the latest one in the saga has come from Zillow.
While the conflict wages on in the courtroom, the tech giant has accused REX of failing its discovery obligations to preserve documents that were relevant to the antitrust lawsuit after it discovered that the brokerage let up to 250 employees keep their company laptops as “severance” after they were fired.
Now, Zillow wants a federal court judge to compel REX to hand over the names of all the employees that left the Texas-based startup since the start of 2021 and state whether they were allowed to keep their work-issued computers.
“Given REX’s allegations that its business faltered and failed as a result of actions taken by Zillow and NAR, the information contained on the laptops of its former employees, which may shed light on, among other things, other reasons for REX’s failings entirely unrelated to Zillow or NAR, is not only relevant but potentially critical to Zillow’s defenses,” read an excerpt from the filing.
The motion also alleges that the discount brokerage has “stonewalled nearly every attempt to investigate the extent of its deficiencies.”
REX initially filed its complaint and lawsuit against Zillow and The National Association of REALTORS® on March 9, 2021, alleging that the online real estate marketplaces were giving preferential treatment to NAR broker listings.
Since filing the lawsuit last year, the Texas-based discount brokerage has maintained—and fervently advertised—its claims that NAR and Zillow have been colluding to steer house hunters toward listings connected to NAR. The company also alleged that the actions harmed its business to the point that they’ve shut down its residential real estate operations.
Zillow and NAR have maintained that the allegations were “without merit” since the lawsuit was filed.
Not long after filing its lawsuit—five months later—REX began laying off some of its employees—an outcome for which it blamed Zillow and NAR. That ultimately served as a precursor to a wind down of its residential real estate operations this year, according to May 2022 reports by The American Genius.
Shortly after news of the wind down broke, Zillow claimed that its attorneys found a former REX employee’s post on Glassdoor providing “Advice to Management” that “when you lay people off, don’t tell them that their laptop is their severance.”
Zillow alleged in its filing that it “repeatedly sought assurances” that REX fully preserved all documents and other materials relevant to the lawsuit. That included requests by the tech giant seeking the identification of employees who were allowed to keep their REX-issued laptops and the efforts to ensure that no materials were destroyed amid the shutdown.
“In addition, Zillow and NAR have sought confirmation that such employees received a litigation hold letter at the outset of this case,” Zillow wrote, adding that REX refused to provide a “substantive response” or provide “sufficient information” to address the inquiries on the matter.
While Zillow declined to comment on ongoing litigation, a spokesperson from NAR stated, “NAR shares Zillow’s concerns.”
“REX’s actions raise serious questions about whether it complied with its obligations to preserve documents that are relevant to the case,” the spokesperson said in an emailed statement to RISMedia.
By filing the suit, REX was obligated to preserve documents it knew would be relevant to the case. However, Zillow alleged that the discount brokerage admitted that documents and materials were destroyed in a footnote of a filing from earlier this year.
The filing indicated that Angela Cook, a former REX employee whom REX had identified as an individual it may call to testify at trial, had wiped her laptop after she departed the company.
“Notably, REX failed to mention this document destruction in any of its letters in response to Zillow’s questions regarding REX’s document preservation efforts,” read an excerpt from the motion.
The motion filing highlighted how Zillow tried several times to gain a response from REX that it was abiding by its obligations but to no avail.
While REX asserted that it was taking steps to ensure that “it can fulfill its discovery obligations,” Zillow claimed that its request for information on the preservation of the laptops was ignored.
REX did not immediately respond to requests for comments regarding this article.
