New CEO Nykia Wright advised NAR’s board of administrators the commerce group’s subsequent step might be to develop a “comprehensive” litigation technique and dimension up any extra authorized publicity associated to its guidelines.
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In the case of authorized points, the Nationwide Affiliation of Realtors has determined to take an extended look within the mirror.
On Tuesday afternoon, new NAR CEO Nykia Wright emailed the 1.5-million-member commerce group’s board of administrators to allow them to know that NAR’s Chief Authorized Officer and Chief Membership Expertise Officer Katie Johnson had “decided to step down,” efficient Oct. 4. The e-mail didn’t say why Johnson resigned, and NAR declined to remark when requested.
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In that very same missive, Wright outlined NAR’s subsequent steps within the authorized realm.
“The next immediate undertaking for in-house legal and outside counsel is to develop a comprehensive strategy for NAR’s approach to all existing litigation and begin an assessment of any additional risk the association has based on current policies and rules,” Wright wrote.
“We are hiring additional outside counsel this week to focus solely on the risk assessment. We also will determine what our internal legal structure should be to prepare NAR for the future.”
Inman requested which insurance policies NAR is assessing; if the Clear Cooperation Coverage, which has come below intensifying scrutiny, is certainly one of them; when NAR will start its evaluation; which extra outdoors counsel NAR is hiring; what NAR is particularly with regard to its inside authorized construction; whether or not Johnson objected to or was an impediment to any of those plans; and if the plans performed a job in her departure. NAR declined to remark.
NAR continues to take care of litigation associated to its fee guidelines, an impending antitrust investigation by the Division of Justice, and a sexual harassment swimsuit introduced by a former worker.
Wright’s electronic mail advised the affiliation’s administrators to ship any authorized questions or considerations to NAR Common Counsel Lesley Muchow at lmuchow@nar.realtor and to ship any member expertise considerations to NAR Vice President of Member Expertise Kate Moore at kmoore@nar.realtor.
Johnson’s sudden departure, and NAR’s resolution to develop a complete technique and assess the authorized danger related to its present insurance policies, comes after 5 years of litigation in main commission-related class-action lawsuits, together with a case referred to as Sitzer | Burnett. In October 2023, a jury in that case discovered NAR and main actual property franchisors had conspired to inflate dealer commissions and awarded a category of Missouri homesellers billions in damages. NAR’s authorized group negotiated a $418 million deal in March to settle that case and different related circumstances nationwide.
That historic verdict, in addition to sexual harassment scandals and associated allegations, have rocked the commerce group. A 12 months in the past, some NAR workers demanded the resignations of then-NAR CEO Bob Goldberg, NAR Head of Human Sources Donna Gland, and NAR Chief Authorized Officer Katie Johnson — all of whom have now resigned.
The workers alleged the executives protected these accused of making a poisonous work surroundings, together with former NAR President Kenny Parcell, who was accused of sexual harassment amongst different allegations at the least way back to March 2022.
Wright’s electronic mail additionally informs NAR’s administrators that the commerce group is working with an outdoor consulting agency to interview affiliation members and leaders.
“With the help of an outside consulting firm, we are currently conducting interviews and validating our research and findings with a diverse set of over 1,000 voices across our members, state and local association leaders, brokers and volunteer leaders,” Wright wrote.
“This is a multi-month project that will yield significant changes in how we articulate our value proposition in the months to come.”
Requested which outdoors consulting agency NAR employed, when the challenge started and when it’s slated to finish, how members will see its last product and which “significant changes” NAR anticipates, NAR declined to remark.
Learn Wright’s whole electronic mail:
Good afternoon –
I’m writing to share that after 17 years of devoted service to NAR, Katie Johnson has determined to step down from her function as our Chief Authorized Officer and Chief Membership Expertise Officer, efficient Oct. 4.
In her almost 20 years on the affiliation, Katie has been steadfast in her dedication to fulfilling NAR’s mission to increasing entry to homeownership to all Individuals. We’re grateful for her service and her many contributions over time.
As we transfer by way of this transition, you’ll be able to direct your authorized questions or considerations to NAR Common Counsel Lesley Muchow at lmuchow@nar.realtor. Member expertise considerations might be directed to Kate Moore at kmoore@nar.realtor.
What are NAR’s subsequent steps?
Authorized
The subsequent instant enterprise for in-house authorized and out of doors counsel is to develop a complete technique for NAR’s method to all present litigation and start an evaluation of any extra danger the affiliation has based mostly on present insurance policies and guidelines. We’re hiring extra outdoors counsel this week to focus solely on the danger evaluation. We additionally will decide what our inside authorized construction must be to organize NAR for the longer term.
Member Expertise
Our ongoing dedication in serving the affiliation is to create a member-centric group that listens, adapts, and innovates to serve our members higher. With the assistance of an outdoor consulting agency, we’re presently conducting interviews and validating our analysis and findings with a various set of over 1,000 voices throughout our members, state and native affiliation leaders, brokers and volunteer leaders. This can be a multi-month challenge that can yield vital modifications in how we articulate our price proposition within the months to return.
Please be a part of me in expressing our due to Katie, and I thanks all to your ongoing dedication as we navigate this transition collectively. We’re dedicated to creating this a easy course of and guaranteeing we proceed to maneuver ahead with power and stability.
Sincerely,
Nykia Wright
CEO
Nationwide Affiliation of REALTORS®
