iYou’d think that after writing a $40mm check you’d learn to comply with the TCPA.
But in the case of Keller Williams, that may or may not be the case.
TCPAWorld readers will quickly recall the case of Deshay v. Keller Williams in which the national real estate brokerage agreed to the largest TCPA settlement of 2023, a whopping 40MM bucks.
But Keller William’s TCPA trouble is not over.
In a new suit Pennsylvania a court just held Keller Williams can be responsible for the conduct of its agents for jurisdictional purpose and it looks like really bad news for KW, and other brokerages that try to distance themselves from agents using a franchise model.
In Havassy v. Keller Williams 2024 WL 1640984 (E.D. Pa. April 16, 2024) the Court denied KW’s motion to dismiss for lack of jurisdiction concluding that KR is responsible for the conduct of agent’s calling individuals in the state.
Here’s the meat of the analysis:
That KWRI employees did not make the phone calls does not mean KWRI had no connection to them. Houston and Hewitt [agents], as prescribed in KWRI’s guidelines, used KWRI’s name when they called potential customers and identified themselves as associated with “Keller Williams.” KWRI controls all advertising and marketing that the Keller Williams Bethlehem office and its agents, Houston and Hewitt, perform using KWRI’s name. Using the Keller Williams logo and the Keller Williams domain in their email addresses enhances KWRI’s brand and consequently its profits.
The agreement governing KWRI’s relationship with the Market Center dictates that the franchisees use “the System” in its operations. The System controls how a Market Center provides real estate brokerage services, including advertising and promotional programs. It also governs training on telemarketing methods. KWRI mandates that the Market Center “provide leadership” to the individual realtors and train them in KWRI’s business philosophy and culture. The individual realtors are trained by the franchisee “in accordance with the procedures” set out by KWRI, including KWRI’s methods and techniques for real estate sales. Hence, we conclude that KWRI’s conduct is related to Havassy’s claims.
One can immediately see the tension between the mandated use of a “System” by KW and any argument that KW does not control the agent. Then again I’ll bet you $1.00 that the “System” does not include cold calling consumers, So KW has a point that while it controls many aspects of the agents’ behavior it does NOT dictate their outbound calling strategy.
Still courts are more focused on benefits derived to a brand from independent marketing than anything else right now–just ask Allstate.
The comparison between what happened to Allstate–using an independent sales agent model–and Keller Williams–using a franchise model is stark, and the lesson is clear: courts are not allowing brands to skirt liability for calls made by individual sales agents in their name.
We’re getting close to the point that insurers and real estate brokers need to abandon the fantasy that the independent contractor relationship will protect them in TCPA suits. It has proven to be a slender reed of late–even as it holds up in other contexts where the caller is a true third party.
