Complaint alleges NRT’s Targeted Agent Recruitment Program uses “significant sign-on bonuses as incentives” to attract top producers.

In May 2019, Realogy CEO Ryan Schneider publicly said he didn’t believe offering agents big signing bonuses was best for his company, particularly for Realogy’s company-owned brokerage NRT where every agent is essentially a free agent, so there’s no guarantee that upfront investment will pay off later.

Realogy CEO Ryan Schneider. (Credit: Kyle Espeleta)

Schneider’s comments contrasted with the recruiting approach taken by Realogy’s archrival, venture capital-fueled private real estate brokerage Compass, which reportedly has lured agents with six-figure signing bonuses.

But in a lawsuit filed July 21 in a state court in Connecticut, a former Coldwell Banker agent and branch manager, Karen Alpi, alleges that NRT, which has 45,000 agents under its umbrella, is offering “significant” signing bonuses of its own.

“In January 2019 NRT’s top management initiated a new recruitment program, the Targeted Agent Recruitment Program, or TARP. A significant amount of money was set aside to use to induce high producing agents to come to Coldwell Banker from competitors,” Alpi’s attorney wrote in the complaint.

“Each manager, including Ms. Alpi, received a list of potential agents and managers were instructed to recruit them using significant sign-on bonuses as incentives. No NRT agents could be recruited, even though they were competitors, which eliminated agents from William Pitt Sotheby’s, Century 21, Better Homes & Gardens, Sotheby’s International Realty and others.”

The complaint alleges that Alpi was unable to recruit anyone under TARP and that in 2020 NRT increased its recruitment requirement to mandate “at least one TARP recruitment per office per quarter,” which the complaint said was “impossible” and caused Alpi’s mental and physical health to deteriorate as a result. She resigned on March 2, 2020, ahead of her planned retirement date of July 2022 when she would turn 70.

The complaint alleges Coldwell Banker “constructively discharged” her ahead of that date by intentionally creating “intolerable work conditions,” resulting in past and future economic loss in excess of $15,000.

“The TARP recruiting requirement, applied uniformly without regard to differing circumstances in Coldwell Banker offices, made Ms. Alpi’s working environment so intolerable that her resignation qualified as a fitting response,” the complaint said.

In July 2019, not long after Schneider’s public disavowal of big agent signing bonuses, Inman received an email from South Carolina agent Matt Carroll of Keller Williams Palmetto who said he was “floored” by Schneider’s remarks.

“Coldwell Banker has made a business out of bringing on agents in our market via signing bonus. I just learned that an agent who had said they were going to be moving their business to my company, just took a large signing bonus from Coldwell Banker in our market instead and went there. My agents are getting offers from Coldwell Banker in our market on almost a daily basis,” Carroll said.

“[T]o infer that Compass is doing this and Realogy isn’t just couldn’t be farther from the truth. We have dozens of agents in our market who are being held hostage by the agreements they signed with Coldwell Banker. In exchange for taking a signing bonus, they agreed to work for CB for X number of years or they have to pay the signing bonus back. They also sign a non-disclosure agreement [or] they risk being required to pay the bonus back immediately.”

Carroll forwarded a July 2019 email to Inman in which a Columbia, South Carolina, Coldwell Banker broker offered an agent “a 19K sign on bonus and 80% split to start out with the ability to go to 90% and start the following year at that same high split.”

In doing so Carroll offered a criticism sometimes lobbed at rival Compass. “This is their recruiting strategy. Rather than providing value for their agents and using that to recruit they are just paying agents to come on board,” he said.

In response to emailed requests for comment, a Realogy spokesperson said, “I can look into this but doubt we will comment on pending litigation.” In regards to Schneider’s comments, the spokesperson referred to Compass’s reported six-figure signing bonuses and said Schneider was “talking about very different things, apples and oranges. TARP is to help producing agents transfer their businesses as they relocate.”

In June, a New York State Supreme Court judge declined to toss Realogy’s explosive lawsuit against Compass, which was initially filed in July 2019 and updated its complaint on September 26. In the complaint, Realogy accuses Compass of engaging in “unfair business practices and illegal schemes to gain market share at all costs and to damage, or even eliminate, competition.”

“To reach its desired ends, Compass steals from, tortiously interferes with, and disparages its competitors,” the complaint continues. “Compass’s very business model is founded on misappropriating, by whatever means necessary, the assets, confidential business information, trade secrets, contracts, talent, and strategies of its competitors.”

Read Alpi’s July 21 complaint:

Email Andrea V. Brambila.
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