Keller Williams was named to a separate class action lawsuit challenging changes to the brokerage’s profit-sharing plan.
On Thursday, James McFarlane filed a complaint seeking class-action status U.S. District Court for the District of Maine. McFarland was in a relationship with Keller Williams from 2004 to 2018.
In the past few weeks, 13 agents formerly affiliated with Keller Williams — Jerry Molder, David Booker, Robert Hill, Kevin Ortiz, Edward ·Fordyce, Paul Davis, Penny Alper, Jana and Denise Caudill, Eric Mendoza, Jack Levine, John Exnisios and Michael DEVLIN — Legal action has been taken against real estate brokerages through the filing of a series of class-action lawsuits.
In February 2020, KW introduced stricter policies on its profit-sharing plan. It said employees who join the brokerage on or after April 1, 2020 and subsequently move to a competitor will lose income from the company’s lifetime income plan. However, this policy does not affect agents who joined before April 1, 2020.
Changes introduced in 2020 also extend the waiting period to become a vested member. But in August 2023, during the KW Super Agent Boot Camp event in Austin, the company’s International Associate Leadership Council (IALC) voted to change the profit-sharing distribution policy. Under the updated policy, the profit share for vested agents who joined before April 1, 2020 and actively compete with KW Brokerage will be reduced from 100% to 5%.
The drive to return to Keller Williams remains. Former agents who return to the company within six months of the effective reduction date will regain 100% of their share of profits, Marc King, now former KW president, wrote in an August 2023 email. The former KW agents in the industry will retain their entire profit share distribution. The new policy is expected to be implemented on or before July 1, 2024.
The plaintiffs argued that the brokerage had no authority to terminate the profit-sharing plan under Keller Williams’ policies and instruction manual. They also claim that unless specifically directed by the IALC, it does not have the authority to modify any aspect of the plan’s methodology for calculating market center profit-sharing contributions or recruiting sponsor profit-sharing allocations. Finally, they claim that any changes to the profit-sharing plan can only be made prospectively, not retrospectively.
