A New Jersey judge granted a temporary injunction in a Realogy-filed lawsuit against a former executive who attempted to flee to Compass, allegedly in violation of his restrictive covenant agreement (RCA). The judge ruled that Compass was complicit in accepting proprietary information and created a ‘dummy’ position to hire him.
“Integrity is the bedrock of our industry, and we are pleased that the Court recognized by ‘clear and convincing evidence’ the misappropriation of our proprietary information and Compass’ complicity in accepting it,” a spokesperson for Realogy said. “We believe this was a well-reasoned decision.”
Realogy’s amended lawsuit, filed July 15, alleges Urvin Pandya, a former finance executive, left Realogy in May of this year to join Compass. The latter allegedly created a ‘dummy’ position and worked with Pandya to find a location for the job to help Pandya to skirt around the restrictions of his RCA which barred him from taking a similar position at a competitor and within a certain radius.
“I find that Compass was complicit in accepting that information and was very interested in hiring Pandya, so much so that they were creative in creating a position for Pandya, a dummy position, and then consciously discussing how to circumvent the 50-mile geographical restriction of the RCA by putting him in Philadelphia,” Judge Maritza Berdote Byrne said in a court transcript obtained by Inman.
Pandya allegedly told Realogy on May 22 that he accepted a job at Compass, according to the complaint. Two days later, Realogy informed Pandya that the move would violate a written agreement that he would not work for a competitor for six months following his departure from Realogy. In exchange for agreeing to the RCA, Pandya was given equity gains, according to the complaint.
Compass began recruiting Pandya in October 2018 as vice president, financial planning and analysis, according to the complaint. When he was turned down for the initial job, he was then contacted again about another position. Ultimately, the complaint says, Compass’ CFO Kristen Ankerbrandt asked Pandya to consider a non-existent position in the finance department. She did not “have approval for the position but feels strongly that it is needed in the organization.”
Byrne also references an email correspondence between two Compass employees that specifically says “because this is a dummy job created by finance to hire Urvin.”
A Compass spokesperson told Inman that the company never created a ‘dummy’ position for Pandya, but rather the word dummy was used as a synonym for ‘placeholder’ and referred to creating a placeholder role in the company’s recruiting software so it could be tracked in their internal system.
In addition to the allegations that Compass created the dummy position to skirt the RCA restrictions, Realogy also alleges that Pandya brought proprietary information.
“We know that on October 25th of 2018, Pandya was part of a small group of Realogy employees who received a highly confidential slide deck containing our competitive intelligence created by Realogy personnel which included Realogy’s analysis and estimation of Compass’ market share,” Mark Saloman, a lawyer representing Realogy said, according to the transcript.
“We know that in early November of 2018, Pandya took that information and he copied it verbatim into a slide deck to present to a direct competitor, to Compass,” Saloman continued. “We also know that Pandya went to Compass and presented the slide containing our confidential information to three top finance executives of Compass, and he knew he was being recorded.”
Compass denies that claim, citing a document it makes all new agents sign promising they won’t bring a former employer’s confidential information of the intellectual property.
“We welcome the best talent to Compass every day, but we never want confidential information from prior employers,” a spokesperson for Compass told Inman. “In fact, all employees are specifically instructed not to bring a previous employer’s confidential information or intellectual property to Compass and sign agreements affirming their understanding of those requirements.”
Inman previously reviewed a document that Compass makes all new employees sign that states as much:
“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.”
The lawsuit against Pandya and Compass is separate from a different lawsuit filed by Realogy against Compass, over “unfair business practices and illegal schemes to gain market share at all costs.”