A $200 million lawsuit from a man who says he was instrumental in the founding of high-profile brokerage Compass before being cut out of the business can move forward to a trial, a judge ruled this week.
Avi Dorfman first filed his lawsuit against Compass back in 2014, claiming that he had met Compass founder Robert Reffkin two years earlier. At the time, Reffkin had allegedly proposed working together and eventually extended a job offer to Dorfman. In exchange for working with Reffkin, Dorfman was allegedly supposed to become a “founding team member” of Compass and would have an ownership of the fledgling brokerage.
The lawsuit claims Dorfman provided Reffkin with proprietary information and technology from his real estate startup RentJolt, and that Reffkin used RentJolt material to solicit investors. However, the suit claims that Reffkin ultimately took trade information from RentJolt and “disposed of Dorfman.”
Compass had previously asked a judge to dismiss the case. But on Tuesday, the judge denied the brokerage’s request, clearing the way for the case to eventually move forward to a jury trial, according to court documents.
Dorfman — who is seeking $200 million in the suit — is now a vice president at investment firm D.E. Shaw and Company. Neither his attorney nor Compass immediately responded to Inman’s request for comment.
At the time Dorfman first filed the lawsuit, Compass was valued at $360 million. In the years since, however, the brokerage has raised more than $1 billion and today is valued at $6.4 billion — raising the stakes considerably for a case that hinges on who actually owns the company.
Compass’ rapid rise has been enabled by, among other things, massive infusions of cash from Japanese investment firm Softbank, which has also backed other high-profile companies such as WeWork.
That rapid rise and the aggressive tactics that came along with it have made Compass a frequent target of criticism, and Dorfman’s suit is not the first that the brokerage has faced.
Most notably, real estate giant Realogy is currently suing Compass over what it says are unfair recruiting methods, among other things. That suit has grown increasingly bitter, with both sides sharply criticizing the other’s practices.