Compass is the target of another lawsuit. This time, it’s from Elegran, a lead generation-focused brokerage in New York City.
This time, New York City-based competitor Elegran is suing Compass and one of its former managers over what it calls a “brazen scheme to unfairly compete with Elegran by stealing Elegran’s confidential information and trade secrets and using them to target Elegran’s other real estate brokers, clients, and potential clients.”
At the center of the complaint is Zino Angelides, a former manager who defected to Compass from Elegran. Compass allegedly recruited Angelides and three other brokers while they were still at Elegran. On June 24, 2019, Angelides and the three other brokers abruptly resigned from Elegran with no prior notice, according to the complaint, and immediately began working for Compass.
“In the weeks leading up to their departure, Angelides and these brokers used Elegran’s resources to plan their move and stole confidential information from Elegran, including a substantial portion of Elegran’s client database and lead list, including exclusive leads that were purchased by Elegran at a wholesale cost of over $2 million, and represent potentially more than $10 million worth of business to Elegran,” the complaint says.
A Compass spokesperson, in a statement, told Inman that it is focused on providing the best experience for its employees, agents and their clients.
“Instead of building a better future for the real estate industry, our competitors are using the court system to stifle competition, but these efforts have been unsuccessful,” the spokesperson said. “Compass will continue on its mission to meaningfully improve the real estate industry and help everyone find their place in the world.”
Compass has been the target of a number of lawsuits from Competitors, including, most recently, a lawsuit filed by Realogy, the nation’s largest real estate holding company. Realogy is suing Compass over, “unfair business practices and illegal schemes to gain market share at all costs.”
Compass has also been sued in the past 18 months by Zephyr Real Estate and Modern Spaces over its agent recruitment practices. Zillow also sued the company recently over poached employees but the two settled.
A Compass source told Inman that all new agents are asked to sign a document stating that they are not allowed to bring any confidential or proprietary information with them from their old firm.
“Please do no bring to Compass any information (documents, emails, reports, notes, forms, etc.) that resides or did reside at your previous firm, in any form,” the document reviewed by Inman reads. “To be clear, do not take any form agreements, templates, etc., even if you created them from scratch while at your previous firm. It is Compass policy to not permit the taking, storing or use of any information from your previous firm in any form.”
Elegran is not without its own controversies. It was revealed by The Real Deal earlier this week that top executives at the lead generation-focused brokerage are behind a network of fake building websites used for lead generation.
See the full lawsuit below:
UPDATE: Story updated with information about Compass’ company contract which forbids agents and employees from bringing proprietary or confidential information to Compass.