Groundless Litigation for Independent Contractors

NAR recently learned that some members have received solicitations from lawyers regarding the independent contractor status in real estate. These lawyers are attempting to instigate groundless litigation and creating a false impression that just following the licensing law – such as required supervision and salespersons only working for one broker – creates an employment status. 

 Here’s the messaging you can share with your agents:

  • These messages are uninformed and are from lawyers trying to create litigation. 

  • For over half a century, salespersons have overwhelmingly chosen the legal option of being independent contractors and running their business under California's real estate licensing law. This has been specifically in the licensing law for decades. 

  • Moreover, the real estate licensing law specifically reiterated the validity of real estate licensees as independent contractors with amendments that went into effect January 1, 2019. These statutes specifically reiterate the independent contractor as a lawful choice between a broker and salesperson. 

  • C.A.R. is in support of AB 5, which is currently working its way through the legislature, refers to existing code sections making clear that existing law supports the independent contractor business model. The licensing law and other laws require independent contractors to have certain protocols including some specific contractual language such as that included in the C.A.R. Independent Contractor agreements and it is important to follow those practices.