Keller Williams has reached a settlement agreement with the plaintiffs’ counsel in the Mcfarlane suit, easing its legal worries. The lawsuit was related to the real estate franchisee’s abandoned changes to its profit-sharing program.
In an email statement, Keller Williams confirmed that the settlement resolves all breach-of-contract lawsuits filed against it by attorneys at the law firm of Humphrey, Farrington & McClain PC. These lawsuits were brought by plaintiffs and former KW agents Eric Mendoza, Jerri Moulder, Jana and Dennis Caudill, Penny Alper, Paul Davis, Kevin Ortiz, and Edward Fordyce.
According to the court docket entry, the parties have until mid-October to submit the proposed draft of the settlement agreement.
Keller Williams spokesperson Darryl Frost mentioned in an email to HousingWire that the matters have been “amicably resolved and settled.”
The Mcfarlane suit, initiated by James Mcfarlane in early May, is just one of multiple lawsuits filed by former KW agents.
These lawsuits arose after Keller Williams announced in August 2023 that it would reduce the profit-share distribution for vested “former” KW agents from 100% to 5%. The changes were intended to take effect in July 2024, but in May, the decision was rescinded by the brokerage’s International Association Leadership Council (IALC).
Agents enter the profit-sharing program by selecting a sponsor when they join a market center. This sponsor then becomes part of the agent’s “profit share tree.” The agent receives a portion of the market center’s profits attributed to the associates in their tree. Keller Williams also allows associates to designate a beneficiary to receive their profit-share distributions upon their death.
As of July, Keller Williams’ market centers have distributed over $2 billion in profits to affiliated agents through the profit-sharing program established in 1987. From the beginning of 2023 through mid-2024, the market centers awarded more than $148 million in profits to associates.
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