Coldwell Banker

O’Melveny successfully resolved a putative class action brought against Coldwell Banker that challenged whether the Company’s sales agents should be classified as independent contractors (as they are) or as employees. This case could have had far-reaching implications for the real estate industry if real estate brokers were found to be misclassified, requiring a fundamental change in how the real estate business operates across the country. After taking over the case from another law firm, O’Melveny quickly worked with Coldwell Banker to issue new independent contractor agreements to its sales agents, which confirmed their independent contractor status and included an arbitration clause, with a class action waiver applicable to the pending class action. Plaintiffs filed a motion to void the new independent contractor agreements, which the Court denied, finding the agreements enforceable. As a result, the individuals who signed the new agreements were effectively removed from the litigation, decimating the potential class and providing an opportunity for O’Melveny to negotiate a favorable settlement on behalf of Coldwell Banker.