A Pennsylvania court has denied a request from brokerage Howard Hanna to issue a preliminary injunction to stop two real estate agents who defected to Compass from competing with or recruiting agents from their former employer.
In a March 23 amended complaint, Pittsburgh-based Howard Hanna alleged New York City-based Compass aided and abetted three former Howard Hanna agents — Michael Hornung, Jennifer Crouse and Leah George — to breach non-compete, non-solicitation and confidentiality provisions in the agents’ contracts with Howard Hanna and steal trade secrets in order to burnish Compass’s image as a disruptive tech company in advance of its initial public offering.
Compass, Hornung, Crouse and George have denied the allegations against them and asked the court to toss Howard Hanna’s claims. Those motions to dismiss are pending.
Howard Hanna’s allegations are similar to those made by Zillow against Compass in an April 2019 lawsuit that ultimately settled and in a July 2019 suit filed by Realogy against Compass that is ongoing. In April, high-end Los Angeles-based brokerage The Agency accused Compass in a lawsuit of illegally trying to prevent The Agency’s new president from soliciting Compass agents and that suit is also ongoing.
On March 25, in response to a motion for a preliminary injunction filed by Howard Hanna against Compass and Hornung, the court entered a consent order in which all parties agreed that Hornung would not violate the terms of his agreement with Howard Hanna that prohibited him from recruiting anyone from Howard Hanna for 18 months after leaving the brokerage and from working for a competitor within a five-mile radius of any Howard Hanna office in which Hornung worked for 12 months after leaving.
In the consent order both Compass and Hornung denied any wrongdoing, but agreed they “will not directly or indirectly possess, misappropriate, sell, transfer, disclose or otherwise use Howard Hanna’s valuable trade secrets or Confidential Information” and Hornung would identify to the court any of Howard Hanna’s confidential information he downloaded or removed from Howard Hanna from Jan. 1, 2021 to Feb. 27, 2021.
In a second motion for preliminary injunction on March 28, Howard Hanna sought to stop Crouse and George from violating their agreements with Howard Hanna, competing with Howard Hanna in violation of those agreements, soliciting any personnel or sales associates to terminate their relationship with Howard Hanna, soliciting or interfering with any listing or buyer brokerage contract held by Howard Hanna at the time of their termination of those agreements and “misappropriating, selling, transferring, disclosing or otherwise using Howard Hanna confidential and sensitive business information,” according to the motion.
The motion similarly asked the court to demand that Crouse and George identify any “valuable confidential and sensitive business information” taken from Howard Hanna and any third parties they provided that information to. The motion also asked the court to require the agents to submit their computing devices, email accounts and storage drives for forensic examination.
On August 6, Judge Christine Ward denied the injunction “in its entirety.” Ward did not explain her decision. Compass and Howard Hanna did not respond to requests for comment. We will update this story if and when we hear back.
Hornung and Crouse countersued Howard Hanna in April for allegedly withholding compensation in the tens of thousands of dollars for work they did before being recruited by Compass. In subsequent filings Howard Hanna denied the allegations and said Hornung and Crouse had been paid what they were owed under their agreements with Howard Hanna.