Ex-Ameriplan rep wins $5.5 million wrongful termination suit

by louabbott on September 9, 2010

Plaintiff’s Houston attorney indicates he has two other suits pending

Anthony Anderson’s win in this suit may have many other distributors and representatives of other network marketing companies wondering if their terminations might be judged similarly by juries.

Over the years, many representatives for many network marketing companies have claimed to have been terminated for grounds ranging from grievous Policy & Procedure violations to minor infractions, to no grounds at all.  The challenge in many cases when the reps try to litigate, they find that they have agreed, in their contracts with the companies, to arbitration, oftentimes making the process impracticable.

Here’s how the Houston Business Journal described the outcome of this case:

A Dallas County jury has awarded a $5.5 million verdict in a contract dispute to a Houston man who was a former independent sales agent for AmeriPlan USA. …

Anthony Anderson worked nine years as a sales contractor for AmeriPlan in the Humble area until the company terminated his contract Nov. 1, 2005. It ceased paying him sales commissions at the end of that month, according to court records.

Anderson argued in court that his contract as a regional sales director entitled him to a vested, lifetime contract for his work signing up health care providers and other sales representatives.

One of the largest incentives for building a multilevel marketing business is the prospect of enjoying long-term residual income from it. When the income is terminated by unilateral action of the company, reasonably, it should be for very strong cause.

This is the second such award that we are aware of in recent history. In February, 2009, a $7 million judgement was awarded in a wrongful termination arbitration against Usana.  See: Judgement will Cost Usana $7,000,000.

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{ 22 comments… read them below or add one }

tina May 4, 2013 at 6:41 pm Thumb up 0 Thumb down 0

What the sense of telling people that it is their own “home based business, they are the owners; then renig on the basic agreement?

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Terressa Nordstrom February 28, 2011 at 5:53 pm Thumb up 1 Thumb down 0

The company I am with has a larger base of providers and DOES PROTECT you in writing to keep your residuals as well as to NOT terminate for “without cause”. Companies for the success of there marketers are out there.

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Ronald Arrington February 27, 2011 at 7:37 am Thumb up 0 Thumb down 0

I was one of the 200 or 900 just unjustly terminated. I believe a class action lawsuit is the answer. filed and tried here in Jefferson county could make the Houston award look small. Or use the Houston Law firm. Who is it? http://www.medplan4me@msn.com

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Susan February 28, 2011 at 12:59 am Thumb up 0 Thumb down 5

Best advice. Get out of MLM and find a REAL job! That’s what I did!

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apibo February 20, 2011 at 2:05 pm Thumb up 0 Thumb down 1

When I posted this on wahm.com, they removed the thread. When I sent an email to my Freedom At Home Team NVP JJ and upline NSD, about the terminations, here’s the response I got:

“Yes, Rumors are going crazy. We knew it was going to happen so just take everything down about 500% notches and somewhere in the middle lies the truth.

Corporate dismissed 200 Sales directors (RSD’s and above). In most cases they were people that had not put on business in the last 18 months at all (But of course those are the people whos cages get rattled easily). Yes part of what we do is earn residuals even if we aren’t working. But at some point in a bad economy a company needs to make decisions on stuff like that. And the sales directors that were receiving checks and not writing business were an obvious YET DIFFICULT decision for them to cut.

I’m reading all the rumors too. They are mostly bitter people who had left Ameriplan before or have been let go. I’m reading about “900” people. That’s incorrect. It was 200. and I’m going to say 180 of them were people that hadn’t produced in 18 months or more.

I’m reading Ameriplan will terminate more people. I spoke to corporate and it is not their intentions to do it again. Nobody wants to terminate people.

I see that the company has helped millions of members. I’ve read and seen so many testimonials and I’ve also experienced the savings myself.
I see that the company has mailed out checks to thousands of ibo’s for the past 19 years.
I see that many want to continue building their business and I’m here to support them.

Our company needs us in a hard economic time. I’m ready, committed and not listening to any rumors. I am in a position of being able to hear the truth and I know where the heart of our company lies! I’m excited and moving forward and hope that helps you.”

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countmein4free@gmail.com February 20, 2011 at 7:55 am Thumb up 1 Thumb down 0

Well as a close friend of mine who was on the top producers trips with the company many times that got term or should i say kicked out, blind sided, what ever you want to call it said. The company is losing money fast, cause every year they was changing the comp plan but not added no new solid medical product or adding benefits to the service. You could google carrington and they offered the same services with more providers in there network as a affiliate program.

The sad thing is all of the reps that didnt leverage there income with side income streams like rental property, investments etc. In this day and age you have to know when the ship is going down and get off the boat. When two of there top reps Mike Mc Donald, Dale Brooks get term for alleged cross promoting. Ask yourself why would two legends of the company making over $200,000.00 search for other companies you do not stay on titanic.

Its much harder today to find a company you can call a home cause you have no control over what the CEO does. So as a independent business owner you have to protect yourself and your families financial future.

I made sure i had 3 back up plans cause you just dont know!

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Dee February 19, 2011 at 6:21 pm Thumb up 0 Thumb down 0

This is all very scary. I have already lost nearly $300 with Ameriplan as a brand new IBO. I am killing myself trying to gather warm leads and have a box of 1,000 business fliers that I will need to throw out now. I hate to admit that this was too good to be true and hate that the CEOs gave this would-be legit MLM company a BAD name by attempting to stab their faithful employees in the back. I took a leap of faith with Ameriplan and I regret it now. I really wanted to earn back what I lost, but I’m thinking it may be safer for me to stop now. I sent an email to corporate and let them know my membership cards were in the mail. I encourage ALL of you to dispute the last charge on your credit card statement. I just did that! If Ameriplan is flooded with disputes from banks/credit card companies because of us disputing it for a refund, they will be FLOODED and forced to refund us. Disputes on their end looks AWFUL. PLEASE EVERYONE—OPEN DISPUTES with your banks and credit card companies! You may not recover all of your money, but at least for the month of. I’m sick of this company and their sly little “rules” and how they make it so difficult to cancel. It’s practically extortion! I used my American Express to pay for my $69.95 start up fee as an IBO and I just disputed it. It was very easy. If you are reading this, just sign into your bank and find the statement they charged you on and dispute it. I did everything online. You can call your bank, but it’s easier to do online. Let’s have Ameriplan come back Monday morning with a few thousand disputes from our banks and credit cards and see how they like that. That should screw up their Finance department and get us our last months refund. They cannot keep charging us like this when we clearly wanted to cancel!

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Anoymous Please February 18, 2011 at 6:34 am Thumb up 1 Thumb down 0

Ameriplan’s 2011 Valentine Day Massacre
On Wed. 2-17-2011 approximately 900 IBO’s in Ameriplan received a letter notifying them that they had been placed in an “inactive” status for 30 days and after the 30 day period – would be terminated.

High income reps that haven’t produced any business in awhile appear to be the target of the “termination without cause” letters. No one knows for sure what the exact criteria was to trigger the letters, and no one really knows WHY they received the letter.

I personally lost several IBO’s in my organization that haven’t done any business in 6 months or so, but were still active in Ameriplan because their residual checks were more than the $50 a month it cost to BE an IBO.

A high level broker in my upline who made about $7,500 a MONTH was also “terminated” without any notification at all.

To say the brokers are mad is an understatement. This came from no where without ANY notification. People relying on their residual checks from years of previous work (1000’s of phone calls and 100’s of meetings before Ameriplan even had web sites) now have nothing. Access to brokers “back offices” have been locked so no one knows what their commission checks are supposed to be.

Looks like this is the end for Ameriplan and the Bloom Brothers are cashing in the checks of terminated brokers before they shut the doors completely. Too bad.

There’s plenty more news on the WHAM board.

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peter ellis November 3, 2010 at 12:48 pm Thumb up 1 Thumb down 0

More people than you imagine read the small print, but decide that there is nothing they can do about it and it will be alright, so they tell themselves, and the most important thing is to make money and everything will slot into place. If only that was true. There is not a MLM that I know of which does not give the Company the right to terminate the contract at any time at its sole discretion and for whatever reason, as Lou Abbott has experienced all too well. They will find out about these two cases but they will dare the affiliate to take them on, which will be particularly daunting for a litigant outside the USA because most of these contracts provide that the law of the state in the USA where the main office is the law which will apply.

I was advised by world ventures that they would only terminate in cases of spamming or severe misconduct, but this was told to me by an affiliate and as it was not in the contract you cannot take it on trust.

When I asked of this of pleasurebuilder.com they never replied, neither did Nu Skin. They just hoped you would go away.

Then what happens to all your commissions you have earned and are continuing to earn from a downline. You can bet your boots that the Company will not be paying them out to you, they will take the lot unless you stop them by legal action.

What should happen is that it should be compulsory for all MLMs to state in their terms and conditions that they will not be able terminate an affiliates contract other than for extreme misconduct. Until this happens every Company will be something to walk away from.

Bearing in mind the recent case that Lou Abbott mentioned recently that any money received directly or indirectly as a result of an introduction by an affiliate whether earned as a direct payment or as commissions on sales or introductions is a pyramid scheme, it strikes me that unless I am missing something the whole of MLM must cease to exist.

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Sheryl Santesson September 15, 2010 at 1:25 am Thumb up 0 Thumb down 0

I am so fortunate to be with a company that we know the owners personally. They work close with all their Distrbutors. They are listed in the local phone book for us to call anytime but Sunday mornings.. Most of us have their cell phone numbers and of course the office phone. We have snuck in the back door. Ten years old and going strong.

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really September 27, 2010 at 12:24 pm Thumb up 0 Thumb down 0

Sheryl,
I really hope it is not with Fortune. They have got all kinds of trouble going on.
There were just found to be lying about their debt free status. This is bound to take them down in court and may possibly bring criminal charges against them.
http://www.fhtmclassaction.info

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MLMBigDog September 12, 2010 at 9:04 pm Thumb up 0 Thumb down 0

From my understanding of the case, Anderson never asserted that the Sales Director Contract could not be terminated as it states. Andersons claim is that even though you may terminate the contract relationship, you can’t take away lifetime, vested benefits that Ameriplan promises each and every IBO they have and ever had. The termination of the contract simply means that the affected IBO cannot continue to personally build their Ameriplan business. The term “Lifetime” was determined to mean the lifetime of the business on the books of Ameriplan, not the lifetime of the Sales Director Contract. The term “vested” means that the income from the business on the books will always belong to the IBO until there is no more business to be paid from. It really doesn’t make any difference what Anderson or any other IBO’s contract is terminated for. If they have acheived the level of RSD they have earned, according to Ameriplan, their lifetime vested contract that is willable and sellable. The jury found that Ameriplan was guilty of 4 counts:
1. Breech of Written Contract
2. Breech of Verbal Contract
3. Fraud
4. Fraudulent Misrepresentation
Apparently, Ameriplan tried to justify and defend their actions and the jury saw a different picture.

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Fran Maane August 24, 2011 at 4:17 pm Thumb up 0 Thumb down 0

Correct, this was breach of contract, misrepresenation, and fraud. Great summary. The issue now is that Ameriplan has terminated between 200 and 900 IBO’s were terimated without cause. Mr. Anderson’s case seems to lay the ground work for other cases. Have you seen any follow up to the 2 other cases the representing attorney said he had against Ameriplan?

Plaintiff’s Houston attorney indicates he has two other suits pending

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Viktoria & Gary Affron September 12, 2010 at 4:30 pm Thumb up 0 Thumb down 0

Sadly the largest problem with home based business owners is that they DON’T READ the Terms & Conditions and the Policies & Procedures. Some companies only have one of the afore mentioned while others have both and they are legally binding. When people don’t take the time to read before clicking on that “I accept or agree” button, they’re setting themselves up for possible future problems. Like the other gentleman stated before us __Your Terms & Conditions and Policies & Procedures ARE YOUR CONTRACT with the company you choose to work with and for!

Folks, this is simple. YOU READ the Terms & Conditions and Policies & Procedures and YOU ABIDE by them. They are the very foundation of YOUR CONTRACT with the company and if necessary YOUR PROOF when and if any issues or problems arise with your membership or distributorship of that specific company.

It’s truly sad when a person is terminated for NO reason. But when these things happen and they haven’t read their own CONTRACT (Terms & Conditions and Policies & Procedures), it’s probable the company HAS it’s reasons which YOU the distributor or representative SHOULD have known by having READ BEFORE the fact thus leaving you NO place to go and only a shred of hope in any action against you for violations or on your behalf should you decide to fight the action taken.

Having been a compliance director in another company, we can tell you that yes it’s disheartening to see something like this happen. Unfortunately, we’re all adults and just like purchasing a home or a car, life insurance or investments. YOU READ the fine print and SUCH SHOULD OCCUR here also with Terms & Conditions and Policies & Procedures. THEY ARE YOUR CONTRACT and your protection IF you abide by them and do not violate them. People who don’t read them and understand them sadly lose out because most of the time they deem them unenforceable or even worse unimportant. Our advice for anyone in a home based business __READ them even if you read them when you joined your present company, RE-Read them and UNDERSTAND them as well as __

PAY ATTENTION FOLKS – THEY DO MATTER!

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Lauralia September 10, 2010 at 6:40 pm Thumb up 0 Thumb down 0

I know the founder and owner of my Company (FHTM) How can these things be hidden?

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FHS September 23, 2010 at 4:45 pm Thumb up 1 Thumb down 0

How sweet, you know Paul, but how well do you know Paul?
No one that I know of has ever been giving a copy of the Policy and Procedures prior to signing the contact. How would you even know there were any?
When you are that sneeky to have this info hidden in a back office that you have to purchase in order to make points, it makes you wonder what else they are hidding!
No rep in his right mind would give up the right to argue a case with the company you are building if they are doing something against you that can cost you your pay!
I hope Fortune gets nailed like this company did.
If a car dealer, a mortage company or bank ever hide info like this they would be arrested and in jail.
I wonder if Bernie is getting his cell ready for Paul?

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Jimmie W September 9, 2010 at 5:05 pm Thumb up 1 Thumb down 1

Good for the plaintif and winner, Anthony Anderson. Guess the percentage of terminated reps for any company that see even a small taste of their efforts? Try none. Well, almost. There’s always Anthony Anderson.

And yes, you have to read the terms, but why bother if most internet home businesses have hidden owners with no mailing addresses. It is hard to serve the owners with legal papers when you don’t even know where they are or what they look like. Sadly, that situation probably applies to 70 percent of your readers, Lou.

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louabbott September 9, 2010 at 5:17 pm Thumb up 0 Thumb down 0

Gosh, Jimmie, I hope and think you are wrong.

I hope far more than 70% of my subscribers would do at least some research into the owners of a company before joining.

Maybe I should poll them?

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Maggie Kress September 9, 2010 at 3:59 pm Thumb up 0 Thumb down 0

Thanks Lou for keeping us informed what is happening in the Network Marketing Industry. It appears that the reps have support against unethical practice and that is good news.

God Bless
Maggie Kress

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Steve Bilenky September 9, 2010 at 3:30 pm Thumb up 2 Thumb down 1

The first step in joining ANY network marketing company is reading, I repeat, reading the “Policies & Procedures” BEFORE you check the box that you “read & understand & agree”.
The Policies & Procedures are your “Contract” with the company. The language in the P&P is not to take up space, it’s there mostly to protect the “Company”! Don’t let anyone try to convince you that it doesn’t mean anything, or “don’t worry about it”.The products and the pay plan mean “Nothing” if you can’t get past the Policies & Procedures, your contract!!! If you can’t understand the Contract, get help, if you don’t agree with even one part, go find another company.
Fortunately my company Policies & Procedures are only 4 pages and there aren’t any gotchas!

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Keith September 9, 2010 at 2:02 pm Thumb up 0 Thumb down 0

K –

Is it AmeriPlan you have been working with/for?

j

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louabbott September 9, 2010 at 4:23 pm Thumb up 0 Thumb down 0

Nope. I have no financial interest in AmeriPlan at all.

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