Keller Williams settles a number of lawsuits related to its profit-sharing program
Keller Williams‘The legal concerns have just become a little lighter. On Friday, the real estate franchisee and counsel for the plaintiffs in the Mcfarlane lawsuit reached a settlement agreement for the lawsuit related to the company’s recently halted changes to its profit-sharing program.
In an email, Keller Williams confirmed that this agreement settles all breach of contract lawsuits brought against it by attorneys from the law firm of Humphrey, Farrington & McClain PC. These include cases filed by plaintiffs and former KW agents Eric Mendoza, Jerri Moulder, Jana and Dennis Caudill, Penny Alper, Paul Davis, Kevin Ortiz and Edward Fordyce.
Under the court docket, parties have until mid-October to submit the proposed draft settlement agreement
In an emailed statement to HousingWireKeller Williams spokesman Darryl Frost said the matters were “amicably resolved and settled.”
The Mcfarlane lawsuit, filed in early May by James Mcfarlane — who worked with Keller Williams from 2004 to 2018 — is just one of more than a dozen lawsuits filed by former KW agents.
The lawsuits began piling up after the company announced in August 2023 that it was reducing the profit sharing benefit for established “former” KW agents – those who joined the company before April 1, 2020 and left for another brokerage – from 100% to 5%. Before this change, established “former” agents benefited from 100% profit sharing even after their departure.
The changes were scheduled to come into effect in July 2024. But in May, the brokerage announced that the International Association Leadership Council (IALC) had made the decision to withdraw the changes.
Agents participate in the profit sharing program by appointing a sponsor when they join a market center. That sponsor then becomes part of the agent’s “profit sharing tree.”
Once the agent has begun contributing to the market center’s operations by concluding transactions, they will receive “a portion of the market center’s profits, which will be attributed to the associates in their family tree.” Keller Williams also allows associate members to designate a beneficiary to receive profit distributions upon their death.
In July, the company announced that its market centers have shared more than $2 billion in profits with affiliated agents through its profit-sharing program, which was first established in 1987. From early 2023 to mid-2024 alone, Keller Williams said its market centers have shared more than $148 million in profits awarded to employees.
