A group of Richmond real estate agents who recently left Long & Foster to launch their own local firm is now facing a lawsuit from their former employer.
The national brokerage filed a lawsuit June 5 in Henrico County Circuit Court against former agents Scott Shaheen, Mahood Fonville, John Martin and Scott Ruth, who a month ago left to start their own firm, SRMF Real Estate, which is also named as a defendant in the suit.
It alleges the defendants conspired to solicit other Long & Foster agents before and after they quit on May 5, and are actively violating non-solicit and non-compete provisions in their employment agreements that were to last for one year in the Richmond market.
The suit claims breach of contract and seeks an injunction stopping the defendants from soliciting agents and competing with Long & Foster for a year. The company asks for at least $376,000 in damages.
Long & Foster is represented by Thamer E. “Chip” Temple III and J. Buckley Warden IV of downtown law firm DurretteCrump. A message left for Temple on Tuesday was not returned.
Reached Tuesday afternoon, Shaheen called the lawsuit “unfortunate” and deferred additional comment to the group’s attorney, Kevin Martingayle of Hampton Roads-based Bischoff Martingayle.
Martingayle, who said he has experience with non-competes, called Long & Foster’s provisions “facially defective” and said his clients have not breached any legally valid obligations to the company.
“I think this is just sour grapes about good old-fashioned competition, and it’s a shame that they’ve decided to go this direction,” Martingayle said.
Included in the SRMF case is a 2012 letter to Shaheen from Long & Foster’s vice president of human resources that includes the provision: “In the event you cease employment with Long & Foster and then work with another real estate firm or independently in the real estate field, you agree that you will not directly or indirectly solicit, recruit, or hire any person who was working as an employee or affiliated as an agent at Long & Foster or its Affiliates, nor will you assist any other person in such efforts for a period of one year from the date of your separation.”
The suit names nine agents who Long & Foster alleges the defendants “successfully” solicited: Taylor Jefferson, Sarah Jefferson, Jacob Hyatt, Cathy Noonan, Tammy Gomer, Marc Kramer, Paige Sheehan, Holly Newman and Melissa Berling.
None of those names appeared Tuesday in an agent search on Long & Foster’s website. LinkedIn pages for two of those named said they still work at Long & Foster, while another’s was updated with the title of associate broker with SRMF. Another LinkedIn page identified the agent as active with both SRMF and Long & Foster.
Shaheen, a regional senior vice president for Long & Foster when he left, said the group has had more agents join the brokerage since it launched May 8. The firm established an office at 420 N. Ridge Road.
The lawsuit alleges the group plotted together to quit at the same time “…and to undermine Long & Foster.” It says the defendants started forming the SRMF Real Estate LLC through the State Corporation Commission on April 25, before their resignation date.
Long & Foster further alleges the defendants misrepresented the company’s policies and utilized their leadership positions to undermine those policies and benefit their company.
Shaheen oversaw 46 offices and 1,500 agents in his role as regional senior vice president, while Ruth, Martin and Fonville were managing brokers at the company’s Tuckahoe, Short Pump and Strawberry Street offices, respectively.
The suit states the group recruited other agents working under contractual agreements with Long & Foster, contending the alleged breaches “are causing irreparable harm and damages to Long & Foster in at least the form of damage to reputation with existing and future customers, future business relationships, good will, and difficult-to-measure lost revenue.”
Martingayle contends that Long & Foster itself has been an aggressive competitor in the marketplace.
“I think that the evidence in the case is going to indicate that Long & Foster has historically been a very aggressive competitor when it comes to hiring agents and brokers,” Martingayle said. “It will be interesting to hear the firm explain why it is so unfair for these individuals to go out on their own and establish a competing firm in light of the company’s history of being such an aggressive competitor itself.”
Martingayle said he has 21 days from when his clients were served to file a response with the court. Shaheen said they were served Wednesday or Thursday of last week.