REALTORS^® A and B were partners in a building company. They both held membership in the XYZ Board of REALTORS^® and were participants in the Board's Multiple Listing Service. After many successful years, they decided to terminate their partnership, with REALTOR^® A continuing the building business and REALTOR^® B forming a new residential brokerage company. As part of their termination agreement, REALTOR^® B agreed not to build new homes in the XYZ Board's jurisdiction for a period of 12 months.

Six months later, REALTOR^® A filed a written request for arbitration with the Secretary of the XYZ Board of REALTORS^®. In his request, REALTOR^® A outlined the terms of their partnership termination agreement pointing out that REALTOR^® B had continued to build new homes in violation of their agreement. REALTOR^® A demanded that the Board take action to enforce the agreement and compel REALTOR^® B to refrain from any further construction.

The Board Secretary forwarded the arbitration request to the Grievance Committee for review. After review, the Grievance Committee found the matter not properly arbitrable.

REALTOR^® A was upset with the Grievance Committee's decision and appealed to the Board of Directors. The Board of Directors noted that Article 17 of the Code of Ethics of the Code of Ethics requires arbitration of disputes ". . .between REALTORS^® associated with different firms arising out of their relationship as REALTORS^®."

What do you think the hearing panel concluded? Show Answer