Real-Estate

The Agency Sues Compass Over Non-Solicitation Contract

Mauricio Umansky, Rainy Hake Austin and Robert Reffkin (Getty)

In October, Rainy Hake Austin jumped from head of operations for Compass’ West Coast division to president of luxury brokerage The Agency.

But when Austin tried to recruit former colleagues, Compass shut the door, citing a clause in her contract she had signed, according to Inman.

Now, The Agency is fighting back. In a federal lawsuit filed Friday, the Beverly Hills-based firm claims Compass’ non-solicitation provision is illegal, and adds that Austin did not actually violate it anyway, according to the report.

Austin was with Compass since March 2019, when the brokerage acquired Northern California-based Alain Pinel Realtors, until her departure for Mauricio Umansky’s brokerage.

A Real Deal investigation earlier this year found that several current and former Compass agents said they had difficulty leaving the firm because of costly clawback provisions in their contracts they hadn’t fully understood at signing.

Compass has faced two other recent lawsuits. The brokerage, which went public on April 1, was sued days later by Pennsylvania-based brokerage Howard Hanna over alleged agent poaching and stolen trade secrets.  Compass encouraged three former Hanna brokers to breach their contracts when they jumped ship, according to Hanna’s suit.

And earlier this year, a former Compass agent sued the firm, this time over allegations of bait-and-switch tactics.

Compass has been on the offensive in court this year, as well. In late January, Compass countersued Realogy, alleging its rival was “flooding the market with false information about Compass” to hurt its business.

[Inman] — Dennis Lynch

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