CBRE, the world's largest commercial real estate brokerage, is stopping one of its former top executives from working at rival Cushman & Wakefield in the coming months with the help of a court order that says Chris Hipps breached his employment contract with CBRE.
Judge Monica Purdy signed a temporary injunction order this month that prevents Hipps from working at Cushman & Wakefield until December. Purdy said in the ruling that it was likely CBRE "will succeed on the merits of its claim" against Hipps, who is appealing the judge's order, and found that Hipps "has and continues to breach section 6 of the employment agreement."
Dallas-based CBRE filed a lawsuit in December in Dallas County District Court shortly after Hipps was named Texas managing principal at Cushman & Wakefield in a new leadership role that was supposed to start at the beginning of this year. However, Hipps has yet to begin leading Cushman & Wakefield's advisory efforts throughout the Lone Star State.
The case shows the lengths commercial real estate brokerages will go to protect what they believe is proprietary information. Brokers are reliant on long-term established relationships with clients that help them win business. In turn, that translates into profits for a real estate services firm.
In the temporary injunction, Purdy said Hipps was in violation of his noncompetition and nonsolicitation obligations outlined in the restrictive covenants of his employment contract with CBRE. He agreed to the contract upon becoming a senior managing director at CBRE in January 2021. Hipps, based in Dallas, had worked in various roles at CBRE for more than a decade.
CBRE told the court in Hipps' role at the firm, he had a "wide responsibility for growing CBRE's capital markets, leasing and asset services business in Dallas-Fort Worth," with access to "highly confidential and proprietary information" to conduct his job. Hipps resigned Dec. 6 to take "a nearly identical role" at Cushman & Wakefield as Texas managing principal, CBRE said in the lawsuit.
In CBRE's petition, the firm said it was seeking monetary relief between $200,000 and $1 million. The Dallas County District Court has scheduled a court hearing about the damages for Jan. 6, 2025.
CBRE declined to comment to CoStar News about the lawsuit. Hipps did not immediately reply to an interview request.
In an email to CoStar News, a Cushman & Wakefield spokesperson said, "We disagree with the court’s entry of an injunction against Mr. Hipps, and as a result, with our support, Mr. Hipps has filed an appeal. Regardless of the outcome of his appeal, Mr. Hipps will be free to work at Cushman & Wakefield, anywhere and in any capacity, in less than nine months. Cushman & Wakefield fully supports Mr. Hipps, and we look forward to him joining our team as soon as possible."
This isn't the first time a real estate services firm has filed suit against a former employee, ultimately forcing a high-profile executive to stay away from the business. Last year, a Texas judge ordered Mike McDonald and Jonathan Napper to stop making any U.S. deals after Cushman & Wakefield filed a lawsuit against the pair claiming they were in violation of their noncompetition and nonsolicitation agreements, as part of their employment contracts, after they exited the real estate services firm for rival JLL.
The Federal Trade Commission has been weighing a proposal that includes requiring companies to rescind existing noncompete clauses and actively inform workers that those restrictions are no longer in effect. The FTC has not issued a rule or given any guidance on when it might do so.