MAX INTERNATIONAL SETTLES MELALEUCA LAWSUIT = $1.2 MILLION
Max International, a Utah health product company, has agreed to pay $1.2 million to Melaleuca, an Idaho company, to settle a lawsuit filed in 2009. The allegations made? Max recruited Melaleuca distributors and urged them to breach their independent contractor contracts with Melaleuca.
MELALEUCA SUED FOR $5.1 MILLION IN UTAH COURT BY TOP DISTRIBUTOR
This is a shocking lawsuit, to include amnesty documents forcibly filled out, and interrogations going on at Melaleuca H.Q. This sounds like it comes out of a spy novel, not an MLM company. Your Editor's opinion: The lawsuit will probably hurt Melaleuca because it reads like a book and could become one of the most popular non-fiction stories in the MLM industry.
MELALEUCA LOSES LAWSUIT IN IDAHO COURT (CLAWBACK)
Melaleuca sued the Foellers who left the company as independent distributors in 2008. Melaleuca tried something new in the MLM world by suing with damages supposedly founded on the commissions these poor folks had earned. The State court did not buy off on this dirty trick and threw out Melaleuca’s request for summary judgment.
MELALEUCA DISTRIBUTORS, GRAVE ROBBERS - BUT PYRAMID?
Editors opinion note: Utah media is abuzz with this story, part fact and the rest ?
26 June 2009 -Dr. James Redd, of Blanding, Utah was the physician that committed suicide after he and his wife were indicted on felony charges of selling ancient American Indian artifacts from gravesites. Now, federal officers allege they may also have been involved in a Ponzi scam.
During a federal raid on June 10, 2009, agents seized computers from the Redds believed to contain evidence of criminal offense, contraband and the "fruits of crime," the document says. A new request was filed this week to widen the search of computers and journals seized from the Redds' home. Investigators say a preliminary review of Jeanne Redd's journal indicates she and possibly her husband "were engaged in a fraudulent scheme to obtain money from a multilevel marketing company."
A Blanding resident, acting as the family spokesman, said the Redds were involved with Melaleuca, a company that sells nutritionals and cosmetics. Back in 2005, Melaleuca gave the Redds an award for a large number of customers enrolled. On Melaleuca's Website the company says it’s not a multilevel marketing company, but in the vacuum of what Melaleuca is …. ouch! Editor's opinion note: Anti-MLM idiots who run Internet sites accuse Melaleuca of being a pyramid scheme. A pyramid is based on recruiting new people and don't sell product. Ed opinion note: Melaleuca brings these on by denying they are a legitimate MLM company with lots of customers. The search warrant didn’t reveal who the fraud victims could be or if it was even remotely related to Melaleuca. But Utah media is having a hay day with this.
MELALEUCA GETS LAW PASSED IN IDAHO
MELALEUCA HANDCUFFS TOP DISTRIBUTORS WITH NON-COMPETE LAW
Ed Note: This is the final copy of the so called "Melaleuca" bill and it is our understanding that it was passed into law pretty much as you read below so now it can be called the "Melaleuca law." A lobby group "Idaho Association of Commerce and Industry" lists the MLM Melaleuca as a client. Why? The owner of Melaleuca probably got tired of filing lawsuits against his distributors that went to work for another MLM - Network Marketing company. Of the senior MLM - Network Marketing companies. it is this editor's opinion that the owner of Melaluca has filed more lawsuits against his own MLM distributors that any other company (exception the old Neways under Tom Mower). We will publish an analysis of lawsuits later when we obtain the case listings (old Neways had 28 pages under Tom Mower).
Watchdog: Editorial analysis is that this action will hurt Melaleuca more than help Melaluca. It appears that the top 5% of distributors in Melaleuca, according to information on their website, don't make that much money! Combine that with the Internet "buzzz" about Melaluca not being an MLM - Network Marketing company, and you have a bad PR mix with this law. At the same time, the IRS is starting to snoop around MLM for distributors being "captured" Independent Contractors. The IRS wants to do withholding on Independent contractors that are not actually Independent. Ouch... this bill won't help the industry and may hurt all of you.
And yes this article is biased.... I still use Melaleuca toothpaste so I am being nice. No - I haven't been in Melaluca since 1988!
IDAHO SENATE BILL NO. 1393
View Bill Status - View Bill Text
View Statement of Purpose / Fiscal Impact
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Bill Status: S1393.......................................by COMMERCE AND HUMAN RESOURCES
BUSINESS INTERESTS - Adds to existing law relating to labor to provide for agreements and covenants to protect employers' legitimate business interests. 02/08 Senate intro - 1st rdg - to printing - 03/18 3rd rdg - PASSED - 43-27-0
Bill Text
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-ninth Legislature Second Regular Session - 2008
IN THE SENATE
SENATE BILL NO. 1393
BY COMMERCE AND HUMAN RESOURCES COMMITTEE
1 AN ACT
2 RELATING TO LABOR; AMENDING TITLE 44, IDAHO CODE, BY THE ADDITION OF A NEW
3 CHAPTER 27, TITLE 44, IDAHO CODE, TO PROVIDE FOR AGREEMENTS AND COVENANTS
4 TO PROTECT EMPLOYERS' LEGITIMATE BUSINESS INTERESTS, TO DEFINE TERMS, TO
5 PROVIDE THAT A COURT MAY LIMIT OR MODIFY CERTAIN AGREEMENTS AND TO PROVIDE
6 FOR ENFORCEMENT, TO PROVIDE THAT CERTAIN RESTRICTIONS OF DIRECT COMPETI-
7 TION SHALL NOT EXCEED A SPECIFIED PERIOD OF TIME AND TO PROVIDE REBUTTABLE
8 PRESUMPTIONS.
9 Be It Enacted by the Legislature of the State of Idaho:
10 SECTION 1. That Title 44, Idaho Code, be, and the same is hereby amended
11 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap-
12 ter 27, Title 44, Idaho Code, and to read as follows:
13 CHAPTER 27
14 AGREEMENTS AND COVENANTS PROTECTING
15 LEGITIMATE BUSINESS INTERESTS
16 44-2701. AGREEMENTS AND COVENANTS PROTECTING LEGITIMATE BUSINESS INTER-
17 ESTS. A key employee or key independent contractor may enter into a written
18 agreement or covenant that protects the employer's legitimate business inter-
19 ests and prohibits the key employee or key independent contractor from engag-
20 ing in employment or a line of business that is in direct competition with the
21 employer's business after termination of employment, and the same shall be
22 enforceable, if the agreement or covenant is reasonable as to its duration,
23 geographical area, type of employment or line of business, and does not impose
24 a greater restraint than is reasonably necessary to protect the employer's
25 legitimate business interests.
26 44-2702. DEFINITIONS. For purposes of this section, the following terms
27 shall have the following meanings:
28 (1) "Key employees" and "key independent contractors" shall include those
29 employees or independent contractors who, by reason of the employer's invest-
30 ment of time, money, trust, exposure to the public, or exposure to
31 technologies, intellectual property, business plans, business processes and
32 methods of operation, customers, vendors or other business relationships dur-
33 ing the course of employment, have gained a high level of inside knowledge,
34 influence, credibility, notoriety, fame, reputation or public persona as a
35 representative or spokesperson of the employer, and as a result, have the
36 ability to harm or threaten an employer's legitimate business interests.
37 (2) "Legitimate business interests" shall include, but not be limited to,
38 an employer's goodwill, technologies, intellectual property, business plans,
39 business processes and methods of operation, customers, customer lists, cus-
40 tomer contacts and referral sources, vendors and vendor contacts, financial
41 and marketing information, and trade secrets as that term is defined by chap-
1 Chapter 8, title 48, Idaho Code.
2 44-2703. CONSTRUCTION AND ENFORCEMENT. To the extent any such agreement
3 or covenant is found to be unreasonable in any respect, a court shall limit or
4 modify the agreement or covenant as it shall determine necessary to reflect
5 the intent of the parties and render it reasonable in light of the circum-
6 stances in which it was made and specifically enforce the agreement or cove-
7 nant as limited or modified.
8 44-2704. RESTRICTION OF DIRECT COMPETITION -- REBUTTABLE PRESUMPTIONS.
9 (1) Under no circumstances shall a provision of such agreement or covenant, as
10 set forth herein, establish a postemployment restriction of direct competition
11 that exceeds a period of eighteen (18) months from the time of the key
12 employee's or key independent contractor's termination unless consideration,
13 in addition to employment or continued employment, is given to a key employee
14 or key independent contractor. Nothing in this chapter shall be construed to
15 limit a party's ability to otherwise protect trade secrets or other informa-
16 tion deemed proprietary or confidential. Ed. Note: Ouch blank check! Scary!!!
17 (2) It shall be a rebuttable presumption that an agreement or covenant
18 with a postemployment term of eighteen (18) months or less is reasonable as to
19 duration.
20 (3) It shall be a rebuttable presumption that an agreement or covenant is
21 reasonable as to geographic area if it is restricted to the geographic areas
22 in which the key employee or key independent contractor provided services or
23 had a significant presence or influence.
24 (4) It shall be a rebuttable presumption that an agreement or covenant
25 is reasonable as to type of employment or line of business if it is limited to
26 the type of employment or line of business conducted by the key employee or
27 key independent contractor while working for the employer.
28 (5) It shall be a rebuttable presumption that an employee or independent
29 contractor who is among the highest paid five percent (5%) of the employer's
30 employees or independent contractors is a "key employee" or a "key independent
31 contractor." To rebut such presumption, an employee or independent contractor
32 must show that it has no ability to adversely affect the employer's legitimate
33 business interests.
Statement of Purpose / Fiscal Impact
STATEMENT OF PURPOSE
RS 17822
This legislation provides that an employer may enter into agreements with key employees and key independent contractors to protect a company's legitimate business interests. The legislation defines "key employees" and "legitimate business interests," and creates rebuttable presumptions as to the terms of the agreements.
FISCAL IMPACT
There is no impact to the general fund.
Contact
Name: Alex LaBeau Ed. Note: A lobbyist working for Melaleuca
Idaho Association of Commerce and Industry - A PR and lobby firm
343-1849
