US agents' status: three-way rule survives appeal, Senate gets a bill

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The US Court of Appeals for the Third Circuit has affirmed the dismissal of a lawsuit that asked for the National Association of Realtors' "three-way agreement" to be removed, the trade publication Inman reported on 8 October 2026. Two days earlier, on 6 October, the association's own news service reported that two senators had introduced a bill to confirm that real estate agents are independent contractors under federal labour law.

The two items come from different places, a courtroom and the Senate, and they answer different questions. One is about which bodies an agent has to join. The other is about what an agent is in the eyes of federal law: a contractor or an employee. Both arrived in the same week, and both touch the way most American agents organise their working lives.

Neither changes anything today. The court left an existing rule exactly where it was, and the bill is a proposal. What follows sets out what each source reports, what remains unknown, and how many people the two questions concern.

Inman, 8 October 2026, for the lawsuit and the list of states; National Association of Realtors, 6 October 2026, for the share of members.

What the appeals court decided

According to Inman, the Third Circuit affirmed the dismissal of a suit brought in 2025 against three bodies: the National Association of Realtors (NAR), the Pennsylvania Association of Realtors and the Greater Lehigh Valley MLS. The plaintiff was a broker-owner in Pennsylvania. As a private party to the case, the broker is not named here.

The case had already ended once. Inman reports that Judge Joseph Leeson of the US District Court for the Eastern District of Pennsylvania dismissed it with prejudice in July 2025. The broker had been allowed to file a second amended complaint and, on Inman's account, provided no evidence in it.

The appeal did not go further. Inman reports that the broker did not file the brief and the appendix that an appeal requires, and that the Third Circuit affirmed the lower court's dismissal.

Some details are missing from the public record as the trade press gives it. Inman's report does not state the date of the ruling, the judges who sat on the panel or the name of the case. This article relies on Inman's account; it reports the outcome and makes no claim about the wording of the decision or the reasons the court gave.

What the lawsuit asked for

The suit had two parts, Inman reports. The first was an antitrust claim. It described the three-way agreement as a monopolistic system, on the argument that a professional who does not join all three levels of the Realtor organisation loses access to the multiple listing services affiliated with it.

The second part was a set of federal civil rights claims. These alleged that the membership bundle places a disproportionate burden on professionals from minority groups.

The relief sought was large. Inman puts the damages claimed at US$5.6 million, alongside changes of policy that included the removal of the three-way agreement itself.

NAR rejected both lines of argument. In a statement reported by Inman, a spokesperson for the association said its policies foster competition and are not discriminatory.

None of those claims succeeded. The district court dismissed the case, and the appeals court has now left that dismissal in place.

How the three-way agreement works

The three-way agreement is the name given to a membership bundle. As Inman describes it, a professional who joins the Realtor organisation joins at three levels at once: the local association, the state association and the national one. A broker cannot pick one level and leave the other two.

The dispute has always been about what hangs on that membership. In the Pennsylvania suit, the complaint was that declining the bundle meant losing access to Realtor-affiliated multiple listing services, the shared listing systems known as MLSs.

That link has loosened since the suit was filed. Inman reports that NAR repealed its rule requiring membership for MLS access on 17 November 2025. Since then, the decision on who may use an MLS has rested with local associations, not with a national rule.

The repeal did not touch the bundle. Inman notes that NAR still supports the three-way agreement. Two questions that used to travel together are now separate:

• Membership. Joining the Realtor organisation still means joining at local, state and national level. That is the three-way agreement, and it stands.
• MLS access. Whether a non-member may use a given MLS is no longer settled by a national membership rule. On Inman's account, local associations decide.

For an individual agent, the practical answer therefore depends on the local association and the MLS concerned. Nothing in the reports reviewed here says how many local associations have opened access to non-members, and this article does not guess.

Six states where challenges have failed

The Pennsylvania outcome is one of a series. Inman reports that a judge in Texas dismissed a separate suit over the three-way agreement about a month earlier; its report on that case is dated 10 September 2026. The same outlet lists other wins for NAR in Louisiana, North Dakota, Illinois and Michigan.

With Pennsylvania, that makes six states in which courts have dismissed challenges to the bundle, by Inman's count. The timeline below places the Pennsylvania case among the other dated events the sources give.

A caution belongs here. The sources say that these cases were dismissed; they do not set out the reasoning of each court. In the Pennsylvania case, what Inman reports is a complaint filed without evidence and an appeal pursued without the required brief. It would go beyond the sources to read the series as a ruling by six courts that the three-way agreement has been tested in full and found lawful. What can be said is narrower and still matters to the trade: every challenge listed has ended without the rule being disturbed.

The Senate bill on contractor status

The second development is legislative. On 6 October 2026, NAR's news service reported the introduction in the Senate of the Direct Seller and Real Estate Agent Harmonization Act. Its sponsors are Senator Mike Lee and Senator John Curtis, both Republicans from Utah. The NAR report gives no Senate bill number.

According to NAR, the bill would confirm that qualifying real estate professionals and direct sellers are independent contractors under the Fair Labor Standards Act. The word "harmonization" in the title points to the reasoning: NAR says the bill would bring that labour statute into line with the way these workers have long been treated for federal tax purposes. On NAR's account, the tax side has treated them as contractors for many years; the bill would say the same thing in the labour statute.

The bill has a companion in the House of Representatives. NAR reports that H.R. 3495 was introduced in 2025 by Representative Kevin Kiley, a Republican from California, and Representative Henry Cuellar, a Democrat from Texas, and that the House Committee on Education and Workforce has advanced it.

NAR supports the measure and is not a neutral voice on it. Shannon McGahn, the association's executive vice president and chief advocacy officer, described the bill in the NAR report as commonsense and bipartisan. In the same report NAR says the real estate industry contributes nearly 20 per cent of US gross domestic product. That figure is the association's own, given in support of the bill.

The table sets the two developments side by side.

How many agents the two questions concern

The contractor question touches most of the profession. In its report on the bill, NAR says 89 per cent of its members operate as independent contractors.

The association's own survey gives a slightly different number. The 2026 Member Profile, published by NAR's newsroom on 25 June 2026, puts the share at 86 per cent. The two figures come from the same organisation and are three points apart; neither document reviewed here explains the gap. On either figure, well over eight members in ten work as contractors.

The same profile gives a sense of scale. It counts 1,438,569 members. It also describes how they work: 53 per cent are with an independent company and 21 per cent work on a team.

The profile also gives income figures. It puts members' median gross income at US$59,200 for 2025, up from US$58,100 in 2024, and median business expenses at US$9,530. The typical member recorded nine transaction sides and US$2.7 million in sales volume. For those with 16 years of experience or more, median gross income was US$88,500.

These are people who are established in the trade. The profile reports a median of 13 years' experience and a typical age of 57, and says 66 per cent of members are women. For such a workforce, a statute confirming contractor status would put into the labour law the arrangement that the large majority already work under, on NAR's figures. It would not create a new one.

The membership question concerns the same population from another side. The Pennsylvania ruling leaves the three-way bundle unchanged.

What changes now, and what comes next

For agents and brokers, the plain reading of the court news is that nothing has moved. The three-way agreement was in force before the appeal and is in force after it. The change the sources do report came from NAR itself, with the repeal of the MLS membership rule in November 2025, and not from any of the lawsuits listed above.

That change sits beside an earlier set of rules the trade already works under. NAR's settlement information page records that the practice changes from its settlement took effect on 17 August 2024: offers of compensation to buyer brokers are no longer made on an MLS, and a written buyer agreement is required before an agent tours a home with a buyer. Those rules concern how agents are paid. The three-way agreement concerns what they join. The Senate bill concerns how the law classifies them. The three are separate, and this week's news touches only the last two.

On the legislative side, the sources give a position, not a calendar. The Senate bill has been introduced. The House companion has cleared its committee. Neither report gives a date for a vote in either chamber, and a bill that has been introduced is not law. Until one is passed and signed, the treatment of agents under the Fair Labor Standards Act stays as it is.

On the court side, the sources announce no further step in the Pennsylvania case.

A court has left the membership rule alone and Congress has been asked to write contractor status into labour law. For now, agents work as they did last week.

Kooky, from Shaka

Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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