A former real estate agent with the tech-focused real estate brokerage Owners.com filed complaints with labor regulatory agencies in all eight states in which the company operates, alleging it misclassifies its agents as independent contractors when they should be considered employees.
Michael Lissack worked with Owners.com in Massachusetts and California for 13 months as a Realtor from March 2017 to April 2018, when he resigned from Massachusetts and was fired from California the following day, he says.
Lissack alleges in complaints filed last month that Owners.com tells its real estate agents what hours they have to work and penalizes them if they refuse; tells them which clients they will service; schedules appointments on behalf of its agents and penalizes them if they can’t meet those appointments — all which he says are grounds for them to be considered full-time employees, eligible for minimum wage and benefits. Lissack’s complaints first came to the attention of Inman via contributor and professional real estate coach Bernice Ross, who contributed to this report.
Asked for a response to Lissack’s claims, Owners.com provided the following statement: “Owners.com has reviewed the allegations and they are without merit.”
This is not Lissack’s first confrontation with Owners.com since he left the company. Earlier this year, Lissack made claims that Owners.com was using misleading advertisements by depicting non-licensed agents in online ads. Owners.com removed some of the ads but denied that they were misleading or violated any regulations.
The use of independent contractors is widespread in real estate. A recent National Association of Realtors survey found that nearly 90 percent of its 1.3 million members were independent contractors. And the IRS classifies most agents as self-employed for tax purposes.
But state laws on independent contractor classifications vary, and a recent California Supreme Court decision, which established a narrower definition of independent contractors working inside the state, has raised new questions inside the industry.
In Dynamex Operations West, Inc. v. Superior Court of Los Angeles, the court laid out an “ABC” test for determining whether or not a worker could be considered an independent contractor. A worker is considered an independent contractor if they pass each of the three standards:
- (A) that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;
- (B) that the worker performs work that is outside the usual course of the hiring entity’s business;
- (C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
In one case, Lissack says he spoke to an agent with the company who said she was suspended because she couldn’t deal with the leads the company was sending her while she was busy with three closings. The agent provided Lissack with the below email, which she responded to to note that she currently had three houses under contract.
Credit: Michael Lissack
In addition to his independent contractor claims, Lissack is claiming that in Florida and Massachusetts, Owners.com does not have a qualified broker to supervise agents.
The California Labor Commissioner’s Office confirmed to Inman Lissack’s complaint was docketed on July 3 and is currently under investigation. The office declined to comment further.
Owners.com is a subsidiary of the publicly-traded real estate technology conglomerate, Altisource. It was originally launched as a online directory of for-sale-by-owner (FSBO) listings in 1996.