No one can predict the future of real estate, but you can prepare. Find out what to prepare for and pick up the tools you’ll need at Virtual Inman Connect on Nov. 1-2, 2023. And don’t miss Inman Connect New York on Jan. 23-25, 2024, where AI, capital and more will be center stage. Bet big on the future and join us at Connect.
The nation’s second-largest title insurer, First American Financial Corp., has agreed to pay the state of New York $4.5 million to resolve allegations that it entered into illegal “no-poach” agreements with competitors not to recruit each other’s employees.
The settlement, announced Friday by New York Attorney General Letitia James, follows similar settlements with each of the other “big four” title insurance underwriters — Fidelity National Financial, Old Republic National Title Insurance Co. and Stewart Title Guaranty Corp.
“First American had secret agreements with competitors that harmed workers’ career opportunities and unfairly kept wages low,” James said in a statement. “New York workers should be empowered to grow within their chosen careers, not held back by illegal agreements meant to reduce opportunities for employees.”
First American — which last week reported $1.5 billion in third-quarter revenue from its title insurance and services business — neither admitted nor denied the allegations, agreeing to the settlement “for the purposes of resolving the [Office of the Attorney General’s] investigation only.”
All told the New York Attorney General’s Office has reached $13.75 million in settlements related to no-poach allegations with seven title insurance companies, including underwriter AmTrust Title Insurance Co. and title insurance agencies First Nationwide Title Agency and Kensington Vanguard National Land Services LLC.
In settling with First American, prosecutors with the attorney general’s antitrust bureau alleged that the company entered into verbal and written no-poach agreements with title agencies and other title insurance underwriters in violation of state and federal antitrust laws.
First American issues title insurance policies directly and through independent title agencies. Both “directs” and “agencies” compete for employees on the basis of salaries, benefits and career opportunities, prosecutors said.
“Directs and agencies have business models that heavily rely on employees’ business relationships,” prosecutors said. “Therefore, hiring and retaining top-performing employees is critical to the competitive significance of the directs and agencies.”
No-poach agreements, New York prosecutors said, “reduce competition for employees and can disrupt the normal compensation-setting mechanisms that apply in labor markets, to the detriment of the affected employees who may be deprived of competitively important information and access to better job opportunities.”
New York launched its crackdown on the title insurance industry’s hiring practices after joining with other states to reach an agreement in 2019 ending the use of “no-poach” agreements by four national fast food franchisors — Dunkin’, Arby’s, Five Guys and Little Caesars.
Get Inman’s Mortgage Brief Newsletter delivered right to your inbox. A weekly roundup of all the biggest news in the world of mortgages and closings delivered every Wednesday. Click here to subscribe.