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A federal court in Chicago has tossed the majority of claims made by a former National Association of Realtors employee in a lawsuit accusing the trade group of retaliation for her complaints of sexual harassment and discrimination. But the court is giving the plaintiff a chance to amend her complaint.
On Tuesday, Judge Georgia N. Alexakis of the U.S. District Court for the Northern District of Illinois, where NAR is based, dismissed four out of five of the claims made by Roshani Sheth, who worked as a project manager for NAR from May 2014 through October 2019.
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The claims — which alleged retaliation under federal and state laws, discrimination, and tortious interference with prospective economic advantage — were dismissed without prejudice, which means Sheth can re-file her complaint to address the judge’s concerns.
A breach of contract claim against NAR was allowed to proceed.
Roshani Sheth
“We will continue on this legal path I have been on for over five years,” Sheth told Inman in a statement.
“We are the second oldest known federal case that has anything to do with NAR in this area, certainly the first and only open legal case brought by a former NAR employee.”
Asked whether she planned to amend her complaint, Sheth said, “It is possible, more to come.”
Sheth has until May 13 to update her suit. If she decides not to, the tossed claims will be dismissed with prejudice, meaning permanently.
In a statement, a NAR spokesperson told Inman, “We are pleased that NAR’s motion to dismiss was granted for four of five claims in this case, and we will defend against the remaining claim before the Court. We cannot comment further on matters of employment.”
Sheth alleges NAR terminated her for reporting sexual harassment allegedly committed by Ken Burlington, who was a vice president of NAR and chief operating offering for the Realtors Information Network (RIN), a wholly-owned subsidiary that oversees NAR’s relationship with Realtor.com, and Matthew Embrescia, president of Second Generation Ltd., a company that has multiple partnerships with NAR.
Ken Burlington
In a separate lawsuit filed in September 2020, Suzanne Mueller, former vice president of industry relations at Realtor.com operator Move, alleged she was fired in retaliation for reporting sexual harassment by Burlington against a female Move employee. That case settled in June 2021.
Linda Russell
Sheth’s suit alleges that Donna Gland, NAR’s former head of human resources, and Linda Russell, NAR’s current vice president of HR, dismissed Sheth’s complaints, placed her on a performance improvement plan and later fired her for allegedly failing to meet that plan’s expectations.
Gland retired from NAR in November 2023 after some NAR employees demanded her resignation as well as the resignations of then-NAR CEO Bob Goldberg and then-NAR Chief Legal Officer Katie Johnson. The employees claimed the executives protected those accused of creating a toxic work environment, including former NAR President Kenny Parcell, who was accused of sexual harassment among other allegations at least as far back as March 2022.
Donna Gland
In December 2019, Sheth and NAR signed a settlement agreement under which Sheth agreed to release and discharge all then-existing claims against NAR arising out of her employment and NAR agreed that its human resources department would respond to any reference requests with only her dates of employment and position titles.
On July 28, 2020, Sheth filed complaints with the Equal Employment Opportunity Commission (EEOC) and the Illinois Department of Human Rights claiming that “agents” of NAR “sent [her] a series of harassing text messages” that called her a “rat,” told her to “shut up,” and to “kill yourself.”
After being fired from NAR, Sheth said she “spent an extended period of time” unable to find new employment in spite of submitting “more than 100 applications for positions for which she was qualified” and in November 2022, a verification specialist from background check company Shield Screening told her they weren’t able to verify her employment details despite “several attempts” to contact NAR.
The EEOC issued Sheth a notice of right to sue in March 2024. Sheth filed suit in June 2024 and amended her complaint in September 2024.
In her order, Alexakis rejected the retaliation claims because she said Sheth had not sufficiently pled a link between the filing of Sheth’s complaints and the allegedly ignored reference requests, noting that more than two years elapsed between the two occurrences.
“In the absence of a purely temporal connection, Sheth must plead some facts suggesting that NAR had a retaliatory motive when it failed to respond to the reference requests,” Alexakis wrote.
Regarding the harassing text messages, Alexakis said Sheth had failed to specify who sent the text messages and how that person was someone over whom NAR had control.
“Without supporting facts (namely, who sent the texts and what their relationship with NAR was at that time), Sheth’s conclusory allegation that the texts were sent through NAR’s agents is not enough,” Alexakis wrote.
Regarding the discrimination claim, the judge said Sheth had not shown that the text messages “materially alter[ed] the terms and conditions of [her] employment,” which had already ended at NAR when she received the messages.
Regarding the tortious interference claim, Alexakis said Sheth had not said that she was told a particular job was hers once her references were checked or that she was first in line to receive a job, and so she did not have “a reasonable expectancy of a future business relationship.”
The breach of contract claim that will go forward alleges that NAR failed to provide neutral references requests as agreed to in its settlement with Sheth.
“[I]t is enough that Sheth pleads she ‘directed all reference requests to Defendant’s Talent Development Department, as per the terms of the Agreement,’ … and that she ‘received communication indicating that requests to obtain references from Employer were met with a complete lack of response,” Alexakis wrote.
“At this early stage, Sheth’s allegation that NAR’s conduct ’caused [her] to lose employment opportunities and delayed career progression’ suffices,” she added.
A status hearing for the case is set for May 27 at 9:30 a.m. Central.
Read the judge’s order (re-load page if document is not visible):
