Inside the Delaware ruling every HR leader at high-growth firms must read
A Delaware court has kept a major workplace misconduct case against eXp Realty alive, putting alleged sexual violence, culture failure and board inaction under sharp scrutiny.
On January 16, 2026, the Delaware Court of Chancery refused to dismiss most of a shareholder lawsuit against eXp World Holdings, the parent of eXp Realty. The suit claims top eXp agents drugged and sexually assaulted women at company events and that senior leaders did not respond appropriately when those reports reached them. The court has not decided whether the allegations are true; it held only that they are detailed and serious enough to move forward.
According to the court’s summary of the shareholder’s filing in Los Angeles City Employees’ Retirement System v. Sanford, influential agents Michael Bjorkman and David Golden allegedly spent years drugging and raping female agents and recruits at eXp events and recruitment trips, with other agents sometimes participating in or aware of the conduct. Women reportedly described being given drinks, becoming extremely ill or incapacitated, and later learning of sexually explicit videos or comments suggesting they had been assaulted. In September 2020, an eXp agent posted on Facebook that she had been drugged at an August 2020 recruitment event in Las Vegas; other women commented that they too had been drugged and sexually assaulted at eXp events.
The suit also zeroes in on eXp’s revenue share model. Agents are independent contractors and can earn as “sponsors” on commissions generated by their “downline.” After three years, sponsors can become “Vested Participants” and keep receiving a share even after leaving the company. Bjorkman and Golden were allegedly in a sponsorship line that ultimately sat in Frederick’s and Sanford’s downline, and Sanford, Frederick and former president Jason Gesing received substantial revenue share payments in 2020 and 2021. The lawsuit says this structure created pressure to retain high‑producing agents despite serious misconduct reports.
On paper, the company had a Code of Business Conduct and Ethics for directors, officers and employees, including a whistleblower policy and anonymous hotline, and separate Policies and Procedures for agents with a Code of Conduct and a harassment section. But the ethics code did not apply to agents, and neither document clearly explained how serious sexual misconduct reports from agents would be escalated to the board. The shareholder filing says the anonymous reporting system was designed for employees, not agents, and that Human Resources and the Director of Diversity and Employee Success were not allowed to see how anonymous reports were handled or to manage agents’ reports through that channel. Few agents, it alleges, knew about or trusted the system.
After the 2020 Facebook post, eXp terminated Bjorkman’s independent contractor agreement for “inappropriate behaviors.” At the same time, internal records cited by the court show the Compliance Committee approved an “Accelerated Compensation Agreement” that allowed his revenue share to vest even though he had been at eXp for less than three years. eXp continued paying him revenue share and allowed him to keep selling real estate with a small team. Golden was not terminated then and remained an agent until February 2023, when his status was suspended the day after the first federal anti‑trafficking lawsuit was filed.
An 11‑page anonymous memorandum sent in October 2020 to then‑CEO and director Jason Gesing, the Director of Agent Compliance and the President of U.S. Growth described a pattern of Bjorkman and Golden traveling to events, drugging women, recording them while they appeared intoxicated and then sexually assaulting them, and said other eXp agents participated in or knew of the behavior. The shareholder filing alleges Sanford personally reviewed the memorandum and did not act.
A director who also consulted on diversity and inclusion, referred to in the opinion as the Whistleblower, is said to have received multiple calls and texts from agents reporting that they had been drugged and sexually assaulted by Bjorkman or Golden. After consulting outside counsel, she sent a detailed message to the board in April 2022, warning that multiple victims with similar stories were coming forward, some feared bullying and retaliation, and the situation posed major culture and brand risks. She urged an independent investigation by a national law firm, sponsorship changes for alleged victims with credible information, a stronger zero‑tolerance statement, an independent whistleblower process for staff and agents, changes to “revenue share for life” so terminated agents would not keep benefitting, and additional inclusion and women’s leadership efforts. According to the filing, the board did not adopt those measures and instead authorized an internal investigation run by five employees, including two officers. The Whistleblower was later put on “whistleblower status,” told by director Randall Miles there would be backlash, and not put forward for re‑election.
The opinion also highlights an agent identified as “Agent Five.” In 2022, she reported to Sanford and a compliance officer that she believed she had been drugged at eXp‑related events in 2018, that multiple women had similar experiences, and that at a 2019 conference Bjorkman had placed a “roofie” in her hand and asked her to take it. She asked to change sponsors so he and others in her upline would no longer profit from her sales. Compliance initially denied the request based on contract language that sponsor selection is permanent. When she escalated by email, copying Sanford, director Dan Cahir, the Whistleblower and the agent she wanted as her new sponsor, she referred to “Rohypnol[,] the rape drug” as part of “the eXp corporate culture” and asked who to contact in cases of sexual abuse or drug poisoning at eXp. Later Compliance Committee minutes summarized her request largely in terms of its financial impact on her upline, including Bjorkman in “vested retirement status,” and did not repeat her broader comments about “rape drug” culture.
By early 2023, three federal suits under anti‑trafficking and state laws had been filed by current or former eXp agents, and The New York Times reported on women who said they had been drugged and assaulted at eXp events. In that context, the Delaware court held that the shareholder had put forward reasonably conceivable claims that Sanford may have breached his duty of loyalty by helping to conceal misconduct to preserve financial benefits and by participating in how the Whistleblower was treated. The court also found it reasonably conceivable that the director defendants and Bramble may have breached their oversight duties by failing to respond in good faith to red flags about drugging, assault and rape at company events, while dismissing a novel “Control Group” oversight theory.
For HR leaders, the opinion is a stark warning. The court treated the alleged pattern of drugging and assault, and how those reports were handled, as a central governance and risk issue, not something to be left quietly to HR. It underscores the need for reporting systems that reach everyone, strong escalation to the board, independent investigations when allegations are grave, and incentive structures that do not reward those accused of causing serious harm.
