Former Keller Williams CEO John Davis Slams Gary Keller, Calls KW ‘Criminal Enterprise’

In these times, double down — on your abilities, on your know-how, on you. Sign up for us Aug. 8-10 at Inman Connect Las Vegas to lean into the change and master from the finest. Get your ticket now for the most effective rate.

Previous Keller Williams CEO John Davis took aim at Gary Keller in a press launch Monday, alleging the Keller Williams co-founder operates the business “similar to a felony organization.”

Davis’s announcement comes as a federal district courtroom in Fort Value, Texas, is deliberating whether to have Davis’s legal promises from Keller, Keller Williams, and former KW President Josh Workforce managed under arbitration.

In the drop, Davis filed a lawsuit in what Davis mentioned is an work to restore his name after sexual misconduct allegations versus him surfaced earlier in 2022 and to recover $300 million in damages. The Oct. 27 grievance also names Inga Dow, the CEO of a number of Keller Williams workplaces who lodged the allegations from Davis, as a defendant. At the finish of January, the courtroom refused Keller’s request to merge the fits filed by Davis and Dow, ruling that they will continue as two individual situations.

In his accommodate, Davis alleges he resigned from KW for the reason that of a disagreement with Keller more than a organization strategy that he believed would provide in less money to Keller Williams workplaces, and that Keller and Workforce responded by smearing him and withholding Dow’s accusations from him when he was negotiating the sale of his KW industry centre areas after his resignation, ensuing in tens of tens of millions in economical losses.

“Mr. Davis seeks a trial by his friends to shine the light on how Gary Keller, Josh Team, and Keller Williams Realty leaders operate their business enterprise and hurt the really individuals that designed Gary Keller, Josh Staff and other folks wealthy,” stated Paul Omodt, spokesman for John Davis, in the announcement Monday. The release was issued by the regulation agency symbolizing Davis, Nesenoff & Miltenberg.

“Our most the latest movement in advance of the court seeks a community forum and argues against Keller Williams’ use of arbitration to shield its misdeeds publicly. Mr. Davis and his crew believe in the energy of their case and feel Gary Keller and his scheme have similarly harmed other people.”

Keller Williams spokesperson Darryl Frost sent Inman an emailed statement on behalf of Keller Williams, Keller, and Staff.

“Unfortunately, Mr. Davis is utilizing the courtroom method, and now his compensated publicist, as a motor vehicle to assert unsubstantiated, unwarranted, and disparaging claims towards Keller Williams and Mr. Workforce,” Frost reported.

“We glance ahead to the option to expose his promises for what they are — an attempt to misdirect interest and lay blame wherever it should not be.”

Keller, Keller Williams, and Staff submitted a motion to compel arbitration in Davis’s case on Feb. 8, arguing that Davis signed “various agreements” with the defendants that include arbitration clauses. On Feb. 13, Dow told the court she agreed with Keller Williams that Davis’s statements — which includes people against her — really should be fixed beneath arbitration.

But on Feb. 16, Davis told the court that an arrangement he signed with Keller Williams on Nov. 4, 2020 “expressly cancels all preceding contracts and agreements.”

In addition, Davis’s lawyers argued that the arbitration agreement the defendants seek out to implement is “unconscionable” due to the fact it is developed to prevent franchise proprietors from suing and as a result trying to keep Keller Williams’ alleged wrongdoings from coming to light.

“Defendants are improperly attempting to silence Davis by broadening the phrases of the arbitration arrangement, mainly because of the probable for extra widespread litigation ensuing from the harms dedicated by Keller Williams and Gary Keller by way of the devaluation of numerous franchise owners’ pursuits about the decades,” the submitting reads.

“The KW Defendants’ existing motion before the Court docket — in search of to keep this scenario and compel arbitration — is portion and parcel of the KW Defendants’ calculated efforts to stay away from liability and deter other folks, like KW franchise entrepreneurs, from asserting their legal legal rights. These kinds of reasoning for secrecy is from community plan.”

Davis’s lawyers especially slam Keller and the way he operates Keller Williams.

“The KW Defendants, and additional specially Gary Keller, run Keller Williams very similar to a criminal enterprise, whereby investments and pursuits are taken or devalued through illegal strategies, whether or not by means of poor reduction of marketplace caps or other indicates, for the reason that of Gary Keller’s greed,” the filing reads.

“Franchise operator victims who are focused by Gary Keller have no choice but to acknowledge noticeably significantly less than marketplace value presents or experience losing their investments by further devaluation. Many franchises are so noticeably devalued by Gary Keller and Keller Williams that their owners have no preference but to give up their investments. Gary Keller and people shut to him have largely profited through the devaluing of passions of franchise holders for numerous decades, and they continue to do so to date.”

Davis’s announcement Monday emphasized that the court’s most recent ruling denied Keller Williams’s “legal maneuvers to retain the case key and concealed … in favor of the public’s correct to know.”

That ruling was on Feb. 17 when the court denied the Keller Williams defendants’ motions to seal both their movement to dismiss and all of the filings related to their movement to compel arbitration, which is why the filings are publicly obtainable.

In that exact same order, Decide Reed O’Connor condemned “querulous behavior” and a “pattern of abrasive conduct” from all of the parties in the scenario and threatened the attorneys included with sanctions for “[a]ny future deviations” from a “high conventional of specialist carry out.”

In a Feb. 20 reply to Davis’s filing, attorneys for Keller, Keller Williams and Staff do not tackle Davis’s allegations regarding the procedure of Keller Williams. Alternatively, they argue that Davis’s posture that the subject arbitration agreement is unconscionable is “unsupported.”

“[T]right here is nothing at all in the Agreement’s arbitration provisions that is ‘sufficiently stunning or gross to compel the court docket to intercede,’ which is the normal for substantive unconscionability,” the submitting reads.

“Finally, arbitration is not against community plan,” the submitting proceeds. “It is very well proven that arbitration of disputes concerning get-togethers is strongly favored below federal and condition legislation.”

Dow did not react to a ask for for comment.

Editor’s observe: Inman received an amended remark from Keller Williams noting the organization was also responding on behalf of Group and Inman has updated the story with that comment.

E-mail Andrea V. Brambila.

Like me on Facebook | Observe me on Twitter

Leave a Reply