Keller Williams is settling some lawsuits related to its profit-sharing plan

Keller Williams‘ legal worries have become easier. On Friday, the landlord and the plaintiffs’ attorney in the McFarlane case reached an agreement to settle a lawsuit related to the company’s recently rejected changes to its profit-sharing plan.

In an email, Keller Williams confirmed that the settlement resolves all breach of contract claims filed by the law firm’s attorneys. Humphrey, Farrington & McClain PC. These include lawsuits filed 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 court filings, the parties have until mid-October to file a proposed draft settlement agreement.

In an emailed statement HousingWireKeller Williams spokesman Darryl Frost said the issues were “amicably resolved and resolved.”

The Mcfarlane lawsuit, filed in early May by James Mcfarlane — who worked with Keller Williams from 2004 to 2018 — is one of more than a dozen lawsuits filed by former KW employees.

The suits began piling up after the company announced in August 2023 that it was reducing the dividend distribution to KWs of “former” KW agents — those who joined the company before April 1, 2020, and then went to another brokerage — from 100% 5% Prior to this change, authorized “former” agents benefited from 100% profit share distribution even after their departure.

The changes were expected to take effect in July 2024. But in May, the brokerage announced that the International Association Leadership Council (IALC) had made a decision to withdraw the changes.

Agents join the profit sharing program by appointing a sponsor when they join the market center. That sponsor then becomes part of the agent’s “profit share tree.”

Once the agent has started contributing to the market center’s business by closing transactions, “he receives a share of the market center’s profits, which will be credited to the participants in their tree.” Keller Williams also allows associates to designate a beneficiary to receive a distribution of profits upon death.

In July, the company announced that its market centers had shared more than $2 billion in profits with affiliate agents through its profit-sharing program, first established in 1987. From the beginning of 2023 to the middle of 2024 alone, Keller Williams said that its market institutions awarded more than $148 million in profits to partners.

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