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A federal court has ordered discount brokerage REX Real Estate to turn over to Zillow a list of employees who have left REX and also kept a REX-issued laptop.
The court issued the order at Zillow’s request after reports that departing employees of REX were allowed to keep their laptops as “severance” and that one employee wiped potential evidence from her laptop. REX pushed back against Zillow’s motion to compel, telling the court that the request was a “fishing expedition” that aimed to embarrass REX before the court.
But Judge Thomas S. Zilly of the U.S. District Court in Seattle decided to grant Zillow’s motion, in part. While Zillow asked for REX to be forced to provide a list of the 250 or so employees who have left REX since January 2021 and to state whether they were allowed to keep REX-issued laptops, Zilly narrowed the ask to employees who had both left and also kept a REX laptop.
“Plaintiffs should categorize that list by last name and last position held at REX,” the order reads. “Plaintiff should have ready access to this information, and it is proportional to the needs of the case.”
REX sued NAR and Zillow in March 2021, alleging antitrust violations for an NAR rule, known as the no-commingling rule, that prompted Zillow to separate non-MLS listings from MLS listings on its website, including listings from REX. When reports indicated that REX was closing shop in May, REX blamed NAR and Zillow for the death of REX’s business model.
Founded in 2015, REX began as a self-described disrupter that employed salaried agents, charged homesellers a 2-percent listing fee, had a policy of never paying outside buyer’s brokers and eschewed MLSs, at least initially.
Zillow’s motion to compel emphasized that the information contained on the laptops of REX’s former employees could potentially point to other reasons for REX’s downfall unrelated to Zillow or NAR. NAR has previously told Inman that the trade group shared Zillow concerns regarding whether REX had complied with its obligations to preserve documents relevant to the case.
In an emailed statement, a Zillow spokesperson told Inman, “We are pleased with the judge’s decision requiring REX to fully participate in the discovery process and fulfill its obligations to protect and produce relevant information and documents related to this litigation.”
Zillow has recently suggested teaming up with REX to rid the real estate industry of the no-commingling rule.
Separately, NAR has withdrawn a motion to compel it filed against REX insurer PIUS to comply with a subpoena for documents in the case. The subpoena sought documents regarding the quality of REX’s technology, services, and marketing and the health of REX’s business. In their withdrawal, NAR’s attorneys do not say whether PIUS complied with the subpoena, but rather that the parties had “resolved the discovery dispute.”
In an emailed statement, NAR spokesperson Mantill Williams told Inman,”PIUS has complied and accordingly we withdrew our motion to compel.”
REX and PIUS did not respond to requests for comment.
Two motions to compel filed by REX against NAR in the case are still pending. The motions demand that NAR produce documents related to two major antitrust commission lawsuits the trade group is fighting, known as Moehrl and Sitzer/Burnett, and that NAR add senior executives — including NAR CEO Bob Goldberg, NAR General Counsel Katie Johnson and NAR Chief Economist Lawrence Yun — to its list of data custodians required to turn over evidence during the case’s discovery phase.
Editor’s note: This story has been updated with a comment from NAR.
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