Deadly MLM Policies and Procedures (Part VI) – Can You Fight Back?

It really angers me that some MLM companies have their entire legal ground covered without giving an inch to you, the hard working distributor who builds the company. There are very few companies that have policies that both protect the company are are fair to the distributor.

If an MLM company says in its policies and procedures that they can terminate you, for any reason, with or without cause, is there anything you can do if they decide to enforce that policy against you? Unfortunately for you, no. There is very little you can do if a company terminates for reasons that are totally unfair to you, because you agreed that they could do it when you signed your contract.

If they terminate you, can you take your downline with you? In most cases, no. The company gets to keep the downline that you worked hard to build with non-compete clauses saying you can’t talk to anybody about another business opportunity for 6 to 12 months. If you do, they can sue you, because again, you agreed to the policy.

So taking them to court for unfair dismissal would be a big waste of time and money. And some companies have themselves well covered there too. They are taking away your right to take them to court. They are just too clever for the unsuspecting distributor. That’s why you absolutely must know your rights before you sign up as distributor.

Here’s a clause that doesn’t sound so bad when you first read it, but let me tell you, your right of free speech, a sovereign right of all individuals in a free country, was just stolen from under your nose.

While the company welcomes constructive input, negative comments and remarks made in the field by Distributors about the company, its products, or compensation plan serve no purpose other than to sour the enthusiasm of other distributors. For this reason, and to set the proper example for their downline, Distributors must not disparage, demean, or make negative remarks about the company, other Distributors, our products, the Marketing and Compensation plan, or the company’s directors, officers, or employees.

With this above clause, the company can say anything about you they like, but you can’t just say anything you feel like about them. If your order was wrong, or your bonus check was a month late and you tell another distributor about your dissatisfaction, you have just violated this policy and could be terminated.

Any controversy or claim arising out of or relating to the Agreement, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Distributors waive all rights to trial by jury or to any court. All arbitration proceedings shall be held in the city of the head office of the Company.

This is a good one. What this means is if you feel a company has acted against you in an unfair manner, such as terminating you without warning after being with them for many years, you can’t take them to court. You’ve waived your rights to trial by court and jury.

Instead you must get on a plane and fly to their home city and tell your story to an arbitration panel of their choice! You just can’t have it your way.

Once a distributor is terminated, the Company shall have no obligation to maintain any content in the distributor’s account.

The lawyer who wrote this clause really earned his money that day.

Do you know what this means? This means the company can purge your account, they can delete record of your relationship with them. If they’ve wrongfully terminated you and you want to take them to court over it, there is nothing to challenge because there is no record of you ever being a distributor with them.

I hope throughout this series of articles on MLM policies and procedures, you’ve gained a valuable insights into the consequences of not reading your policies and procedures. The policies and procedures will reveal the true integrity of a company to you and whether they’ll look after you when situations get tough.

Thanks to MLM mentors, Bob and Anna Bassett for their work in uncovering MLM policies and procedures and inspiring this post.

For more insights, listen to Bob and Anna Bassett’s coaching call on MLM policies and procedures.

To your MLM success,

Wayne Wu
Founder, The Profitable Networker

P.S. I would love your input! If you have an opinion that would contribute to this discussion, please leave me a comment below.

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Related posts:

1. Deadly MLM Policies and Procedures (Part II) – How Long Is Yours?
2. Deadly MLM Policies and Procedures (Part III) – Termination and Renewal
3. Deadly MLM Policies and Procedures (Part I)
4. Deadly MLM Policies and Procedures (Part IV) – Making You Responsible!
5. Deadly MLM Policies and Procedures (Part V) – Are You Being Blackmailed?
6. Are You Risking Your Future With A Short Sighted MLM Company?
7. Will Your Network Marketing Company Allow You to Retire?

Tagged as: Free Speech, Mlm Company, Non Compete Clauses, Policies And Procedures, Unfair Dismissal