Melaleuca and Frank VanderSloot Sued by Terminated Rep

by louabbott on December 9, 2010

Former high-earning “Marketing Executive” for Melaleuca alleges that after being “interrogated” by Melaleuca management and an in-house attorney, she was wrongfully terminated then publicly slandered by the company and VanderSloot

The lawsuit, T. Dorfman, Inc. and Terry Dorfman individually vs. Melaleuca, Inc. and Frank L. VanderSloot individually, was filed two days ago on December 7th in the United States District Court in the District of Utah, Northern Division and seeks a judgment against Melaleuca for “not less than $5.1 million.”

The detailed Dorfman vs. Melaleuca and VanderSloot complaint runs 19 pages long. Among the more provocative allegations, the lawsuit claims:

…Ms. Dorfman was interrogated by Christensen, Felton and Nelson beginning at 9:30 a.m. at Melaleuca’s headquarters in Idaho Falls.  Excluding a break for lunch, the interrogation of Ms. Dorfman proceeded until approximately 3:00 p.m.

…70. After the interrogation, Ms. Dorfman left Melaleuca’s headquarters. Shortly after leaving, she received a phone call demanding she return to headquarters to meet with Vandersloot.

71. Ms. Dorfman returned and met with Vandersloot and Nelson for continued interrogation. This second round of interrogation was audio-taped.

…73. Vandersloot accused Ms. Dorfman of being more loyal to her friends than to Melaleuca. Ms. Dorfman informed Vandersloot that she was loyal to Melaleuca and had worked to develop her business day and night at the expense of her personal life.

74. Vandersloot accused Ms. Dorfman of not being fully forthright in reporting individuals that she knew were involved with Max.

75. Vandersloot told Ms. Dorfman that he would spend every cent he had crushing Max.

…77. On Friday, August 6, 2010, Ms. Dorfman received a telephone call from Christensen and Nelson telling her that Melaleuca was terminating TDI [Terry Dorfman, Inc.] or violations of Policy 20. During this phone call, Christensen and Nelson demanded that Ms. Dorfman pay back all money she had earned from Melaleuca since May 2008 – an amount totaling $677,177.26.

…82. At the meeting for executives and senior directors, Vandersloot told the attendees that Max was stealing Melaleuca’s IMEs, and that Ms. Dorfman was intimately involved in Max’s efforts to steal Melaleuca’s IME’s. Vandersloot also told all attendees that Ms. Dorfman had violated her contractual obligations to Melaleuca by violating Policy 20, that she had lied to Melaleuca to cover it up, and that Melaleuca had terminated Ms. Dorfman as a result.

83. Vandersloot threatened all in attendance that Melaleuca was obtaining subpoenas of telephone records of numerous former marketing executives, and that Melaleuca would find out who was talking to distributors at Max and sue them as a result.

…85. Vandersloot also announced that Ms. Dorfman had made in excess of $600,000.00 from Melaleuca during the time she was purportedly violating her contract with Melaleuca, and that Melaleuca was going to sue her to get it back.

86. Vandersloot also warned the attendees that if they talked with Ms. Dorfman at all, they would be sued by Melaleuca.

87. The defamatory statements were made solely for the purpose to threaten and instill fear in the minds of the attendees that regardless of income levels, Melaleuca would terminate and sue any marketing executive if there is any suspicion of a marketing executive violating the company’s so-called Policy 20.

88. After Vandersloot spoke about Ms. Dorfman, Nelson told the attendees that “crying” would not help anyone avoid being terminated, implying that the termination of Ms. Dorfman was an emotional disturbance and occurrence for Ms. Dorfman.

Causes of action against Melaleuca are listed as breach of contract, breach of implied covenant of good faith and fair dealing, defamation/slander, tortious interference with existing business relations, and interference with prospective business relations.

We will post Melaleuca’s response here as soon as it becomes available to us.

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{ 6 comments… read them below or add one }

Bill March 22, 2013 at 3:56 pm Thumb up 0 Thumb down 0

I hate to say it but when a company thinks Totalitarian and that they “own” the affiliates and the affiliates have to sink or swim in that one company I am scared of that company. These should not be an unethical attack on a company if one has gained information in an illegitimate way but now that you can scrape leads and do phone broadcasting who is to say what is what?

Be careful of any company that does not want to offer the right to the pursuit of happiness to any man or woman.

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Edward July 5, 2012 at 3:16 am Thumb up 1 Thumb down 1

Ivan- Melaleuca is not a qet-rich-quick scheme. It takes a lot of hard work.
I’ve been involved with them for a long time. I’ve learned the business side of it is not my thing, and I’m not saying I think they’re perfect, but call it what it is, and a get-rich-quick scheme it is not, nor do they claim to be.

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Ivan February 20, 2012 at 10:03 pm Thumb up 3 Thumb down 3

The more I read about Vandersloot’s tactics, the more he sounds like he took lessons from Scientologists. A cult is a cult even if when disguised as a “get rich quick marketing scheme.”

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suzanne tower June 29, 2011 at 11:05 pm Thumb up 3 Thumb down 3

if frank vanderslott truly cares about his employees or once employees, i really hope he will listen to me…im sure i am a nobody to him, but i really need him to desperately listen to what happened to me as a once business builder. i thought i was finally doing something right when i decidied to do melaleuca as a business as a single mom of 3 and in debt….it would mean the world to me if i could just talk to him personally and let him know what happened with the starting of my business…i havent been able to sleep in the last 5 years because of it, and im not kidding. i know he is a big wig making lots of money, but i would truly think so much more of him and the company(which i do believe in), if he would just give me 5 minutes of his time, personally, to talk to me and let me explain what happened while i was doing the business because it is HUGE and a lifetime impact that happened and i dont think i will be able to get a good nights sleep for the rest of my life if i cant just talk to him personally for 5 minutes….i am a real person, struggling mother of 3, big time, and i would think so highly of him and his company if he would just give me that time so i may be able to sleep just a little at night…plzzzzz contact me…thank you sincerely if you do make me feel that important for just once…suzanne tower 781-854-8265…im not crazy or like every1 else…this is truly a story that hopefully will blow your mind as much as it has mine, but yet has affected me for the last 5-6 years emotionally and i just need your help and input so i can put this all to rest…thank you sooo much for your time…please allow me to speak with you, for just a few minutes, please…thank you so much…suzanne tower again, my cell is 7818548265 and my email is towergirl62@man.com

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Budd Haugen December 10, 2010 at 7:48 am Thumb up 3 Thumb down 6

This whole thing most likely started because she worked real hard and made over $600,000 ..As we all know mlm companies do not like it when a dist. starts to make to much money..

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Peter Arnold December 9, 2010 at 11:25 pm Thumb up 0 Thumb down 3

Hi Lou:

Again, thank you for keeping us abreast of these ((often unfortunate)) developments.

Sadly once again, this episode underscores the HIGH RISK involved with letting one’s “MLM” BE their “business”.

Too many in our industry are doing it wrong – they’re “wrapping their whole identities” around their MLM (Mr. Amway – Mrs Avon, etc).

The problem with this is – when it becomes their ONLY (or primary) income source – and “something goes terribly wrong” (like with the Melaleuca / Vandersloot mess) – they’re extremely vulnerable!

What can they (we) do to help lessen the risk? Well, for starters…

(1)- DIVERSIFICATION – A (hopefully, good) MLM should be only “one part” of any entrepreneur’s overall “Business Enterprise” (which itself should have a nice “mix” of non-competing revenue streams).

(2)- SELF BRANDING – Reps need to find creative ways to build their OWN List ((first)) – not the “company” brand, or their “products” – as they would much prefer.

P&Ps – MLM companies typically have “awful” P&Ps (Policies & Procedures) – the Legal Contract that Reps “agree to” when they join with an MLM – unfortunately, without even reading it, let alone “studying” it. Most have a ton of “gotchas” in the fine print – which put ALL the control and power in the hands of the COMPANY – not the Rep.

ANMP – As a 23-year professional in our industry – and having served on the Board Of Directors of our professional association (Association of Network Marketing Professionals – http://www.TheANMP.org – formerly the DRA) for almost 4-years, representing Canada, I confess that I truly saw the good, the bad, and the ugly of our industry – FIRST HAND.

UP FRONT – Yes, there is more GOOD in our industry than there is bad, by a long shot — but there IS indeed a “dark side” too – which is…

RISK Factor – By far, most of the major issues between Corp and Reps + most of the “ugly” lawsuits (checks frozen / wrongful terminations, etc) – center on clauses in those ((archaic, boiler-plate!)) P&Ps – that the Reps “agreed to” when they joined.

TRIANGLE – There are always three (3) SIDES to these things – the Rep’s – the Corp’s – and the truth! :>)

Nevertheless, when I see – in Melaleuca’s case – “ugly” phrases such as – – –

— Vandersloot threatened all in attendance

— Vandersloot also warned the attendees that…

— Ms. Dorfman was interrogated by…

— Vandersloot accused Ms. Dorfman of…

— Vandersloot told Ms. Dorfman that he would spend every cent he had crushing Max…

— she received a phone call demanding she return to headquarters…

I personally have to wonder about the threatening, DICTATORIAL nature of that bloody crap – from a 20+ year old Giant Company in this industry!

((I was with Melaleuca for 8-years, a long time ago – and “lawsuits” between them and their Reps were all too common back then too!))

Reps are (supposed to be) INDEPENDENT CONTRACTORS => “not” EMPLOYEES — but you would never know that from the above ((my opinion)).

Another nasty LAWSUIT — another BLACK EYE for our industry. And guess who always has the “deeper pockets” when this occurs?

Hopefully, this can end up getting resolved, for both parties – there are no real “winners” when a company’s reputation gets tarnished – and/or when a Rep’s family suffers financial and emotional anguish!

MISSION – Let us hope that the day will come in our industry when the relationship between Rep and Company can be moulded in a NEW direction – where an authentic “business partnership” will emerge between both parties – with greater professionalism, tolerance, sensitivity, respect – and INTEGRITY – reigning supreme.

Appreciate your tireless efforts on our behalf, Lou.

—————————————————————————–
More Detailed Info on this => http://www.MLM-Wise.com
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Further Detailed Info on this => http://www.MLM-Wiser.com
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Sincerely / Peter A.

Peter Arnold, CLU, CFC / Founder
Business Achievers Academy / Canada

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