Holter v. Moore & Co.: Tenth Circuit Upholds Broker/Principal's Right to Set Commissions Without Finding That Sales Agents Conspired to Fix Prices of Commission Rates

In Holter v. Moore & Co., the Tenth Circuit affirmed the district court's holdings in finding that sales agents could not conspire with their broker/principal and that there was no violation of the Sherman Antitrust Act.

Holter sold his home in Fort Collins, Colo. through Miller, a sales agent for Moore & Co. (Moore). Holter paid Moore a 7% commission on the sale. Holter claimed that Moore, the second largest residential real estate broker in the state, invariably charged 7% for the sale of a home. Holter brought suit for himself, and on behalf of all persons who paid a 7% commission for homes sold through Moore in the four years prior to the filing of this suit, claiming that Moore's sales agents "conspired" and "agreed" to fix prices (commission rates) at that amount. The allegations were based on the assertion that such a conspiracy to fix commissions violates the Sherman Antitrust Act.

The Court rejected Holter's contention that there was enough evidence to support a charge of unlawful conspiracy under the Act, despite the general rule that a corporation cannot conspire with its officers or agents to violate the Act. In support of that argument, Holter cited cases in which corporations were held to conspire with their subsidiaries or affiliates. Holter also urged adoption of a test used by the Fifth Circuit, where no conspiracy was found but the court noted that one might exist if an agent had an "independent personal stake in achieving the object of the conspiracy." Holter urged that the sales agents had the required independent personal stake in the 7% commissions, and thus could be held to have conspired with Moore to maintain that percentage. In support of his independence argument, Holter presented evidence of the agents' in federal employment tax status as independent contractors.

The Court was not persuaded by Holter's arguments, and stated that antitrust liability is governed by considerations of economic policy, not by labeling. The Court also stated that agents are not independent for purposes of the Sherman Act simply because they are paid by commissions or have no income taxes withheld. They further stated that payment on commission may give the associates a "personal" stake in the business to a greater extent than a salaried employee, but it does not create an independent personal stake.

Holter v. Moore & Co., 702 F.2d 854 (10th Cir. 1983).


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