Distributor Rights – What To Do About Termination



What To Do About Your
Distributor Termination
By Larry Hercules J.D.
Originally published in the MLM Insider  Magazine Oct 1998 issue



As in any field of industry, good productive persons are hard to find, hard to employ, and hard to retain. Those persons who are top producers in the MLM industry are no exception. They are constantly being recruited and told they can continue to be stars with their current company, and at the same time, be a star receiving millions of dollars in a second company — the company to which they are being heavily pursued.
      MLM companies, of course, do not want their Stars attention, even part-time, on building the success of another MLM company. The existing MLM company can see nothing good for its own future in having its Stars work in behalf of any other MLM company.
    Star MLM persons are in some ways comparable to Star athletes. Like it or not, their every move is being watched by their downline and other distributors of their MLM company. They often receive too much praise and too much criticism. If the Star thinks enough of a second MLM company to become its distributor and promote its products and/or services, there may be others who will want to follow that example. It would be relatively easy for a Star to recruit other distributors from his first company to become distributors in the Starâs downline in a second company. Such recruits could be those persons personally sponsored by the Star in the first MLM company, persons in the Starâs downline but not personally sponsored, distributors of the first MLM company not in the Starâs downline, and persons who are not distributors of the first MLM company. This article will not discuss the legality of recruiting distributors from the first MLM company to the second MLM company due to lack of sufficient space.
      Sometimes, believe it or not, a MLM company will terminate a Star distributor with allegations of violations of that companyâs Policies and Procedures – sometimes with merit and sometimes without merit. If that happens to you and you believe the termination is without merit you may want to consider legal action against your former MLM company. I suggest that the following information be submitted to the attorney that you engage to represent you:
  1.  Your name, addresses and telephone numbers.
  2.  The name of the MLM Company, its address, telephone numbers and fax numbers.
  3.  Your sponsor’s name, addresses and telephone numbers.
  4.  The knowledge of your sponsor concerning the factors that led to your termination.
  5.  What kind of support can be expected from your sponsor in your pursuit of damages against the MLM Company.
  6.  The dates of your distributorship.
  7.  A copy of the MLM Company’s marketing plan, policies and procedures from the date of your becoming a distributorship and all changes thereto.
  8.  Copies of all commission checks for the past 24 to 36 months and Forms 1099 for each year of your distributorship.
  9.  Copies of all correspondence between the MLM Company and you.
  10.  A month-by-month analysis of the number of distributors in each level of your downline.
  11.  A list of names and telephone numbers of each person in your downline who is a potential witness to support your claims as to damages.
  13.  A list of names and telephone numbers of each potential witness whose testimony would support the assertions of the MLM Company.
  14.  A summary of the expected testimony of all potential witnesses whether for or against you.
  15.  Copies of all calendars, journals, and schedules establishing your MLM activities.
  16.  Copies of long distance telephone bills for the past 24 months.
  17.  Your response to allegations from the MLM of your activities justifying your distributorship termination.
  18.  A list and narrative history of each other MLM distributorship you have owned including any and all disagreements and or terminations with other MLM companies you have experienced.
  19.  A detailed description of all legal disputes of any kind in which you have been a plaintiff or defendant (civil and criminal).
  20.  A detailed history of your health (physical and emotional).
  21.  A detailed list of all honors you have received academically, in the business world and/or in your community.
  22.  Character witnesses names, telephone numbers, how they know you and their relationship to you.
  23.  Your economic situation.
  24.  Names and telephone numbers of former distributors of the MLM company who were either terminated for alleged similar reasons or quit for similar reasons.
  25.  Names and telephone numbers of former employees of the MLM Company whom you believe would be witnesses supporting your position against the MLM Company.
  26.  Details of any past or current lawsuits involving the MLM company with any third party.
After analyzing the above information, an attorney can evaluate the strength of the terminated distributorsâ claim against the MLM Company.
Larry K. Hercules is an attorney with 32 years of trial experience. He has been the top MLM distributor for a national nutritional company, and he has represented several MLM companies . In recent years he has been developing a litigation practice representing distributors who believe their distributorships were unjustly terminated.
4 years ago


    1. Unfortunately, Rod isn’t able to do consulting any longer.

      What kind of help are you needing? Perhaps I can direct you to someone who might be of better assistance.

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