New CEO Nykia Wright told NAR’s board of directors the trade group’s next step will be to develop a “comprehensive” litigation strategy and size up any additional legal exposure related to its rules.
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When it comes to legal issues, the National Association of Realtors has decided to take a long look in the mirror.
On Tuesday afternoon, new NAR CEO Nykia Wright emailed the 1.5-million-member trade group’s board of directors to let them know that NAR’s Chief Legal Officer and Chief Membership Experience Officer Katie Johnson had “decided to step down,” effective Oct. 4. The email did not say why Johnson resigned, and NAR declined to comment when asked.
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In that same missive, Wright outlined NAR’s next steps in the legal 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 asked which policies NAR is assessing; if the Clear Cooperation Policy, which has come under intensifying scrutiny, is one of them; when NAR will begin its assessment; which additional outside counsel NAR is hiring; what NAR is looking at specifically in regards to its internal legal structure; whether Johnson objected to or was an obstacle to any of these plans; and if the plans played a role in her departure. NAR declined to comment.
NAR continues to deal with litigation related to its commission rules, an impending antitrust investigation by the Department of Justice, and a sexual harassment suit brought by a former employee.
Wright’s email told the association’s directors to send any legal questions or concerns to NAR General Counsel Lesley Muchow at lmuchow@nar.realtor and to send any member experience concerns to NAR Vice President of Member Experience Kate Moore at kmoore@nar.realtor.
Johnson’s sudden departure, and NAR’s decision to develop a comprehensive strategy and assess the legal risk associated with its current policies, comes after five years of litigation in major commission-related class-action lawsuits, including a case known as Sitzer | Burnett. In October 2023, a jury in that case found NAR and major real estate franchisors had conspired to inflate broker commissions and awarded a class of Missouri homesellers billions in damages. NAR’s legal team negotiated a $418 million deal in March to settle that case and other similar cases nationwide.
That historic verdict, as well as sexual harassment scandals and related allegations, have rocked the trade group. A year ago, some NAR employees demanded the resignations of then-NAR CEO Bob Goldberg, NAR Head of Human Resources Donna Gland, and NAR Chief Legal Officer Katie Johnson — all of whom have now resigned.
The employees alleged the executives protected those accused of creating a toxic work environment, including former NAR President Kenny Parcell, who was accused of sexual harassment among other allegations at least as far back as March 2022.
Wright’s email also informs NAR’s directors that the trade group is working with an outside consulting firm to interview association 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.”
Asked which outside consulting firm NAR hired, when the project began and when it is slated to end, how members will see its final product and which “significant changes” NAR anticipates, NAR declined to comment.
Read Wright’s entire email:
Good afternoon –
I am writing to share that after 17 years of dedicated service to NAR, Katie Johnson has decided to step down from her role as our Chief Legal Officer and Chief Membership Experience Officer, effective Oct. 4.
In her nearly two decades at the association, Katie has been steadfast in her commitment to fulfilling NAR’s mission to expanding access to homeownership to all Americans. We are grateful for her service and her many contributions over the years.
As we move through this transition, you can direct your legal questions or concerns to NAR General Counsel Lesley Muchow at lmuchow@nar.realtor. Member experience concerns can be directed to Kate Moore at kmoore@nar.realtor.
What are NAR’s next steps?
Legal
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. 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.
Member Experience
Our ongoing commitment in serving the association is to create a member-centric organization that listens, adapts, and innovates to serve our members better. 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. This is a multi-month project that will yield significant changes in how we articulate our value proposition in the months to come.
Please join me in expressing our thanks to Katie, and I thank you all for your ongoing commitment as we navigate this transition together. We are committed to making this a smooth process and ensuring we continue to move forward with strength and stability.
Sincerely,
Nykia Wright
CEO
National Association of REALTORS®
