Recruitment can be a useful tool to attract talent for real estate companies and teams.
QUESTION: Is it legal or ethical for REALTORS® to recruit salespeople and brokers from other real estate companies or teams?
ANSWER: Neither the REALTOR® Code of Ethics nor Rhode Island license law regulate or mention recruitment. However, laws that prohibit actions, like misleading advertising, slander, libel, price fixing, and group boycotts, still apply. If a team wishes to recruit members from other teams within the same office, make sure to check with the principal broker to find out whether any office policies apply.
QUESTION: Is it legal or ethical for a REALTOR® to criticize a competitor practices or business model as a recruitment tactic?
ANSWER: It depends on whether the information is truthful. Rhode Island license law and the REALTOR® Code of Ethics prohibit misrepresentation. This means recruiters cannot lie about a competitor’s statistics, policies, business model, etc. or their own company’s details. Real estate companies may use innovative or aggressive marketing tactics for recruitment just as they may to promote themselves to consumers but making personal attacks or encouraging salespeople or associate brokers to break their independent contractor agreements can have consequences. Recruiters should also keep in mind that the National Association of REALTORS® Pathway to Professionalism includes a section about “Respect for Peers.” These voluntary standards include the following:
▪“Show courtesy, trust, and respect to other real estate professionals.”
▪“To be successful in the business, mutual respect is essential.”
▪“Real estate is a reputation business. What you do today may affect your reputation—and business—for years to come.”
Questions? Please contact the RIAR Legal Department at 401-432-6945 or email her at email@example.com.