When representatives of one company leave for another company, there are many potential legal issues that affect the lives of many.
This excerpt from the Idaho Business Review (that originated with the Associated Press) was published yesterday and will undoubtedly affect many in both Melaleuca and Max to at least some degree:
BOISE – Idaho health and home products company Melaleuca Inc. accuses a Utah company of raiding some of its top sales staff, infringing on company trade secrets and competing unfairly.
Idaho Falls-based Melaleuca filed a lawsuit in federal court Nov. 16 against Max International, its top sales executive and dozens of former Melaleuca sales executives.
The complaint seeks more than $10 million in damages and asks a judge to issue an injunction that would stop future sales staff raids. The lawsuit also seeks to cancel a meeting scheduled for Nov. 21 that’s described as another attempt by Max International to lure away top Melaleuca sales talent and their customer data …
The lawsuit accuses Max of attracting at least eight of Melaleuca’s best sales staff in the last year and encouraging each to recruit Melaleuca customers, sales staff and others …
The lawsuit accuses Max of luring Melaleuca sales staff with lucrative payments and using information from those Melaleuca business reports, causing former Melaleuca employees to violate noncompete agreements that are designed to prevent workers from using inside knowledge to benefit a direct competitor.
The lawsuit accuses Max of attracting at least eight of Melaleuca’s best sales staff in the last year and encouraging each to recruit Melaleuca customers, sales staff and others.
Melaleuca is asking for a jury trial and for a judge to issue a restraining order barring Max from recruiting more Melaleuca sales staff. It also seeks a restraining order on a sales presentation planned by Max on Nov. 21 in Atlanta because it “promises to be another unlawful raid of Melaleuca marketing executives.”
Erin Edmonds, Vice President Legal Affairs for Max International, could not be immediately reached for comment.
It’s interesting that the article, in more than one incidence calls the eight former, highly successful distributors for Melaleuca “sales staff.” That makes it sound like they were employees. They were, in fact, independent contractors as all distributors associated with network marketing companies are. Whether used intentionally or because the reporter simply doesn’t understand the industry, it is misleading.