I previously asked this question on the legality of anti-poaching agreements. If it's not illegal for two companies to enter into an agreement not to poach each others' talent, why is it legal for a NAR® to state,
REALTORS® shall not solicit a listing which is currently listed exclusively with another broker.
Why is that though? I mean if I solicit a listing from a client who is locked into an exclusive listing with another broker, but the other broker isn't the procuring cause of the sale it sounds to me like the other broker will not be entitled to a commission and I will (subject to my contract). How is a non-compete between two brokers for a client in contract permissible in real estate, but not in other forms of employment?
Here are two questions from my practice ethics quiz (not exam)
When can a REALTOR® “solicit” another broker’s exclusive listing?
- a. Never.
- b. At any time – anti-trust laws prohibit restrictions on such activities .
- c. If the owner initiates the contact and the REALTOR® has not directly or in direct ly initiated the discussion¸ the REALTOR® can discuss the terms of a future li sting .
- d. If the owner does not initiate the contact but the REALTOR® initiates a d iscussion at a social event¸ the REALTOR® can discuss the terms of a future listing.
They're saying the answer is "C". But how can it be legal to tell me that I compete with another broker for a client through a discussion I initiate with social even
When can a REALTOR® deal with the client of another REALTOR® who has an exclusive agreement with the client?
- a. Never.
- b. At any time – there are no restrictions on this activity.
- c. If the client initiates the dealings.
- d. If the client returns a call after the REALTOR® has initiated the dealings.
They're saying the answer is "C". But again, if I prospective client calls me after a general mailing (which they permit) it's not clear to my how it's legal to say we can't compete and "deal" in terms of future listing or for business?
Just wanting to get a better idea of how these non-competition agreements work in real estate and what guiding law limits their use, and when they reach over into being anti-competitive.