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

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Former Keller Williams CEO John Davis took goal at Gary Keller in a press launch Monday, alleging the Keller Williams co-founder runs the corporate “much like a prison enterprise.”

Davis’s announcement comes as a federal district courtroom in Fort Price, Texas, is deliberating whether or not to have Davis’s authorized claims towards Keller, Keller Williams, and former KW President Josh Workforce dealt with beneath arbitration.

Within the fall, Davis filed a lawsuit in what Davis mentioned is an effort to revive his repute after sexual misconduct allegations towards him surfaced earlier in 2022 and to get better $300 million in damages. The Oct. 27 grievance additionally names Inga Dow, the CEO of a number of Keller Williams workplaces who lodged the allegations towards Davis, as a defendant. On the finish of January, the courtroom refused Keller’s request to merge the fits filed by Davis and Dow, ruling that they’ll proceed as two separate circumstances.

In his go well with, Davis alleges he resigned from KW due to a disagreement with Keller over a enterprise technique that he believed would usher in much less revenue 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 market heart areas after his resignation, leading to tens of hundreds of thousands in monetary losses.

“Mr. Davis seeks a trial by his friends to shine the sunshine on how Gary Keller, Josh Workforce, and Keller Williams Realty leaders run their enterprise and hurt the very those who made Gary Keller, Josh Workforce and others rich,” mentioned Paul Omodt, spokesman for John Davis, within the announcement Monday. The discharge was issued by the legislation agency representing Davis, Nesenoff & Miltenberg.

“Our most up-to-date movement earlier than the courtroom seeks a public discussion board and argues towards Keller Williams’ use of arbitration to protect its misdeeds publicly. Mr. Davis and his workforce imagine within the power of their case and imagine Gary Keller and his scheme have equally harmed others.”

Keller Williams spokesperson Darryl Frost despatched Inman an emailed assertion on behalf of all of the KW defendants.

“Sadly, Mr. Davis is utilizing the courtroom system, and now his paid publicist, as a automobile to say unsubstantiated, unwarranted, and disparaging claims towards Keller Williams,” Frost mentioned.

“We sit up for the chance to disclose his claims for what they’re — an try to misdirect consideration and lay blame the place it shouldn’t be.”

Keller, Keller Williams, and Workforce filed a movement to compel arbitration in Davis’s case on Feb. 8, arguing that Davis signed “quite a few agreements” with the defendants that embody arbitration clauses. On Feb. 13, Dow informed the courtroom she agreed with Keller Williams that Davis’s claims — together with these towards her — ought to be resolved beneath arbitration.

However on Feb. 16, Davis informed the courtroom that an settlement he signed with Keller Williams on Nov. 4, 2020 “expressly cancels all earlier contracts and agreements.”

Furthermore, Davis’s attorneys argued that the arbitration settlement the defendants search to implement is “unconscionable” as a result of it’s designed to forestall franchise house owners from suing and subsequently retaining Keller Williams’ alleged wrongdoings from coming to gentle.

“Defendants are improperly attempting to silence Davis by broadening the phrases of the arbitration settlement, due to the potential for extra widespread litigation ensuing from the harms dedicated by Keller Williams and Gary Keller via the devaluation of many franchise house owners’ pursuits through the years,” the submitting reads.

“The KW Defendants’ current movement earlier than the Courtroom — in search of to remain this case and compel arbitration — is a component and parcel of the KW Defendants’ calculated efforts to keep away from legal responsibility and deter others, together with KW franchise house owners, from asserting their authorized rights. Such reasoning for secrecy is towards public coverage.”

Davis’s attorneys particularly slam Keller and the way in which he operates Keller Williams.

“The KW Defendants, and extra significantly Gary Keller, run Keller Williams much like a prison enterprise, whereby investments and pursuits are taken or devalued via illegal techniques, whether or not via improper discount of market caps or different means, due to Gary Keller’s greed,” the submitting reads.

‘Franchise proprietor victims who’re focused by Gary Keller haven’t any alternative however to simply accept considerably lower than market worth gives or face shedding their investments via additional devaluation. A number of franchises are so considerably devalued by Gary Keller and Keller Williams that their house owners haven’t any alternative however to surrender their investments. Gary Keller and people near him have largely profited via the devaluing of pursuits of franchise holders for a few years, they usually proceed to take action to this point.”

Davis’s announcement Monday emphasised that the courtroom’s most up-to-date ruling denied Keller Williams’s “authorized maneuvers to maintain the case secret and hidden … in favor of the general public’s proper to know.”

That ruling was on Feb. 17 when the courtroom denied the Keller Williams defendants’ motions to seal each their movement to dismiss and the entire filings associated to their movement to compel arbitration, which is why the filings are publicly out there.

In that very same order, Decide Reed O’Connor condemned “querulous habits” and a “sample of abrasive conduct” from the entire events within the case and threatened the attorneys concerned with sanctions for “[a]ny future deviations” from a “excessive commonplace {of professional} conduct.”

In a Feb. 20 reply to Davis’s submitting, attorneys for Keller, Keller Williams and Workforce don’t tackle Davis’s allegations concerning the operation of Keller Williams. Somewhat, they argue that Davis’s place that the topic arbitration settlement is unconscionable is “unsupported.”

“[T]right here is nothing within the Settlement’s arbitration provisions that’s ‘sufficiently stunning or gross to compel the courtroom to intercede,’ which is the usual for substantive unconscionability,” the submitting reads.

“Lastly, arbitration isn’t towards public coverage,” the submitting continues. “It’s effectively established that arbitration of disputes between events is strongly favored beneath federal and state legislation.”

Workforce and Dow didn’t reply to requests for remark.

E-mail Andrea V. Brambila.

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