The legal and ethical implications of group boycotting in real estate
Group boycotting in the real estate industry has become an increasingly controversial topic. While some argue it helps level the playing field, others see it as unethical and potentially illegal. This article examines the complex issues surrounding group boycotting and why it often crosses legal and ethical lines.
What is group boycotting?
Group boycotting refers to when multiple real estate brokers or agents collectively agree to not work with or share commissions with certain other brokers or agents. For example, a group of agents may decide to never show houses listed by a particular brokerage or never refer clients to a specific agent. The goal is to freeze out and weaken the business of targeted individuals or companies.
On the surface, group boycotting may seem like fair competition. If agents don’t want to work with someone, that should be their choice, right? But in reality, group boycotting often violates antitrust laws and ethical business practices for several key reasons.
Restraint of trade
Group boycotting essentially amounts to collusion among competitors. When agents collectively agree not to work with a broker or agent, they are restraining trade and reducing competition in the marketplace. This violates antitrust laws, such as the Sherman Antitrust Act, which prohibits anticompetitive agreements.
Additional reading: Why illegal real estate agents are still a problem
Access denied
Group boycotting often cuts off access to an essential service that certain brokers or agents need to properly conduct business. Limiting access to the MLS database or refusing to show certain listed properties makes it very difficult for targeted individuals to fully participate in the market.
Client steering
Boycotting groups will frequently steer clients away from doing business with the agent or brokerage they are targeting. This interferes with the client’s ability to freely choose who they want to work with. Client steering based on a group boycott rather than the client’s best interests is unethical.
Divisiveness
Group boycotting breeds divisiveness and toxicity within the real estate community. It creates an “us vs. them” mentality that damages professional cooperation and problem-solving. This toxic environment ultimately hurts consumers.
While competition breeds excellence, group boycotting tends to breed dysfunction. There are more ethical ways for real estate professionals to further their interests without resorting to potentially illegal and unprofessional tactics. Change is better accomplished through constructive action, not punitive boycotting.
