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Three⁤ former agents of Keller Williams Realty, Jerri L.‌ Moulder, David ​L. Bueker,⁤ and‌ Robert E. Hill, have initiated legal proceedings against the real estate ⁣brokerage.‍ They have filed three separate ​class-action lawsuits, challenging changes⁣ made to Keller Williams’ profit-sharing program.

Details of the Realty Lawsuits

Moulder, who was associated with Keller Williams from ​2002 to 2011, filed a complaint on March 22 in the U.S. District Court for the Western District of Texas in San Antonio. The complaint alleges breach of contract ⁢and unjust‌ enrichment, seeking damages of $250 million.⁣ Moulder’s complaint contests the modifications made ​to Keller‌ Williams’ profit-sharing program and demands a reversal of the ‍new​ policy.

The‌ next day, ‌Bueker, a former KW agent from 2003 to 2011, lodged a similar complaint in ⁢the ⁢U.S. District Court for the Eastern District of Missouri in St. Louis. Bueker’s filing mirrors Moulder’s, but it also seeks a preliminary injunction⁢ to prevent the redistribution of disputed payments ‍under the Profit Sharing Program.

On⁤ March 25, Robert ‌E. Hill, a former KW agent ⁢from 2002 to 2013, filed a similar complaint in the U.S. District Court of Kansas‍ in Kansas City. Hill also demands a preliminary injunction to halt the redistribution of disputed payments.

Changes⁢ to the Profit-Sharing Program

In February⁤ 2020, KW introduced a more restrictive ⁢policy to its profit-sharing program. The policy stated that associates who joined the brokerage​ on or after April 1, 2020, and ⁢subsequently moved to a competitor would lose their revenues from the company’s lifelong revenue program. However, this policy did not affect agents who‍ joined before April 1, 2020.

The 2020 change also extended the wait period to become a vested member. But in ‍August 2023, during KW’s Mega Agent Camp event in Austin, ⁣the company’s International Associate Leadership⁤ Council (IALC)‌ voted to revise the profit-sharing distribution policy. Under the updated policy, ‌vested⁢ agents who joined before April 1,⁣ 2020, ‍and actively ⁣compete with KW brokerages would see their profit share reduced from 100% to‌ 5%.

Reaction to the Changes

Both the Moulder and Bueker lawsuits, filed by ‌the firm of Humphrey, Farrington⁢ & ⁣McClain, based in Independence, Missouri, argue that Keller Williams breached its contract with agents by​ retroactively altering the profit-share ⁤program. ⁣They also highlight a provision ⁤added by the IALC in August, allowing KW to use profit-share program funds‍ for legal defense against disputes.

According to the complaints, a report presented to the IALC in August 2019 revealed that approximately $25 million to ⁣$40 million had been paid in profit-sharing distributions to non-Keller Williams ⁣participants⁢ who⁣ were ⁢directly competing with the company.

History of the Profit-Sharing ⁤Program

Gary Keller, co-founder ‌of Keller Williams, introduced the⁣ concept of profit ​sharing for agents in 1986.⁤ Keller and the company’s first Associate Leadership Council⁤ created‌ the profit-share system, and an early version of⁤ the program was officially launched in 1987.

The principles of the ⁤program ‌are⁢ straightforward: Owners of individual Keller Williams market centers allocate about 50% of ⁢their monthly office​ profits to associates who play a key role in attracting new talents to the company. When an associate agent joins any KW market center, they ‌have ⁤to name their sponsor. On the 21st of the following month, a portion of the market center’s profit is automatically deposited ⁤to the sponsor’s ​account.

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