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The ongoing legal battle between former Keller Williams CEO John Davis and the brokerage has been heating up. But when it comes to at least one issue in the lawsuit, the court has sided with Gary Keller, his firm, and other current and former KW executives.
Last week, Magistrate Judge Hal R. Ray Jr. issued an order striking Davis’ demand for arbitration from the record. In his ruling, the judge called the filing “redundant, immaterial, impertinent, and scandalous.” Despite this ruling, Davis will not be held in contempt of court as the defendants had sought.
“Demand for Arbitration is not only redundant, since the Court appointed an arbitrator for this matter, but it also is impertinent and contains immaterial and scandalous allegations,” the order states.
The order does not offer clarity on which allegations Ray deemed scandalous. But the filing in question states that a Keller Mortgage employee was fired after she reported alleged sexual misconduct by Gary Keller’s son, John Keller.
Davis claimed that the allegations against John Keller were covered up by general counsel Stacie Herron, and that Gary Keller paid off the accuser with $1 million of his own money. Additionally, Davis said that Gary Keller gave Herron a $1 million bonus and a promotion to interim chief operating officer for assisting with the alleged cover-up.
In an April 2025 filing, Gary Keller asked the court to make Davis pay for what he claims are “baseless attacks” against him, his company and family members. He said that Davis is attempting to “bully and intimidate” him through this suit.
Originally filed in August 2023 and refiled in December 2023, Davis’ racketeering suit makes claims of financial impropriety against Gary and John Keller, as well as former KW president Josh Team.
Other defendants listed include Business MAPS Ltd., Business MAPS Management LLC, 72Sold, Johnathan Dupree, Marc King, Jason Abrams, Matt Green, William Soteroff, KWx, Livian and KW Southwest Region.
According to the initial complaint, after the franchisees signed a contract, the defendants then required them to adopt KW’s present market cap, which is the fee that agents pay to their market centers.
Davis alleges that these fees went to increasing technology fees and the purchase of “unneeded goods and services” from KW-owned and affiliated companies, such as MAPS training and coaching.
As the legal battle has ramped up, Davis has made further claims that Gary Keller, John Keller, Herron, Team and Mark Willis “misappropriated, diverted and embezzled” millions in fees through KWx, and that Team received $10 million in kickbacks, among other allegations against the defendants.
The years-long legal battle actually began back in 2022, when sexual misconduct allegations were brought against Davis, three years after he left the company. The allegations against Davis were dismissed in 2023.
Currently, the parties are debating whether the other has wrongfully delayed the court-ordered arbitration process. Keller Williams declined to comment on the judge’s order.
