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Triple Threat

Wednesday, May 25, 2016  
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Orlando REALTOR® | MayJune 2016

Sticks and stones may break your bones, but degrade another REALTOR® on social media and you’re at risk of getting hurt by the COE (plus a potential anti-trust or defamation suit)

Q: I found out that several REALTORS® in my area who are in a Facebook group have been making negative statements about my business model (I am a flat-fee broker) that include inaccurate and derogatory comments about me and how I do business. One of the agents apparently wrote that he is not going to show my listings anymore and urged others to do the same. It also got back to me that an e-mail was being forwarded around to a few agents with the same comments. I understand the real estate market is competitive, but doesn’t this cross the line? Isn’t there something unethical about this kind of conduct?

A: For some reason, when people get on their keyboard they become brave and often say things that they would never say to someone’s face. But of greater concern, they sometimes say things could potentially get them into legal trouble. The type of posts and e-mails between REALTORS® that are described in this scenario raise not only ethical concerns, but could also possibly result in costly litigation and damages.

First, as to the ethical concerns, Article 15 of the REALTOR® Code of Ethics provides that REALTORS® shall not knowingly or recklessly make false or misleading statements about other real estate professionals, their businesses, or their business practices. Standard of Practice 15-2 clarifies that this article is also violated when a REALTOR® knowingly or recklessly publishes, repeats, retransmits, or republishes false or misleading statements, whether this is done in person, in writing, by technological means such as the Internet, or otherwise. Thus, in considering whether Article 15 was violated, a professional standards hearing panel will need to make a determination as to whether the Facebook statements that were made in this scenario, as well as the e-mails that were forwarded, were made by these REALTORS® with knowledge that they were false or misleading, or were made in a reckless manner, meaning they were made with disregard for whether the statements were true.

Secondly, from a civil standpoint, there could also be a potential claim for defamation against the REALTORS® in this scenario if it can be established that the statements made about you and/or your business practices were:

  • False;
  • Were made with some degree of malice; or
  • Resulted in injury to your reputation or damaged your business.

 Such a defamation claim would be a civil matter handled through the courts.

Of much more serious concern, though, are the potential antitrust implications of these posts and e-mails. Both federal and state antitrust laws prohibit any type of contract, combination, or conspiracy that restrains trade. While most REALTORS® know that the antitrust laws prohibit price fixing, many are unaware that they also prohibit certain boycotts. A boycott exists when two or more competitors discuss or agree on how they will treat a third party, usually with an intent to drive that party from the marketplace or to force them to conform how they conduct their business. An example would be when two or more brokers agree that they will not offer compensation to a new broker. While each broker is free to make his own unilateral decision, the antitrust implications arise when there is some type of agreement between the brokers.

In this scenario, these REALTORS® have placed themselves at risk of having to defend an antitrust allegation when they engaged in conversations via Facebook and e-mail suggesting that they not show this brokerage’s listings and refrain from doing business with him. It is important for REALTORS® to take the potential for such claims very seriously. Antitrust litigation is extremely expensive in terms of attorney fees and the potential for damages, as well as costly fines. And criminal charges can also be filed that, if proven, can result in both criminal fines and prison time.

The take away from this scenario is that what you say can sometimes have costly legal and ethical consequences. So before e-mailing other agents or brokers about another REALTOR’S® business practices, posting something on Facebook, or sending that tweet, remember you are creating a written record that never truly goes away. For this reason think long and hard about what you write to avoid placing yourself at risk of an ethics violation or something much worse. Instead, the safe practice is to make your own decisions about how you choose to do business with your competitors and don’t discuss it with other REALTORS®

This legal articles is intended to provide broad, general information about the law and is not intended to be legal advice. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.

Source: Ohio Association of REALTORS®, OAR Daily Buzz

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