OpTree

The suit that doesn’t seem to go away - MonaVie vs. Quixtar - Round 3.

MonaVie, LLC, creator of the leading nutritional acai blend beverage, filed to dismiss a lawsuit brought last month by Quixtar North America, a sister company to Amway Corporation. In the court filing, MonaVie claims that the Quixtar suit is without merit.

“Out of our commitment to protect the interests of MonaVie and independent distributors everywhere, we filed a complaint against Quixtar/Amway regarding their aggressive non-compete clauses,” said Dallin Larsen, MonaVie founder and president. “The following day, Amway filed a complaint of its own against MonaVie. We believe that Amway’s claims are baseless, and were made solely in response to the suit that we filed.”

MonaVie filed its lawsuit on March 17, 2008, asking the court to rule whether Quixtar/Amway has been over-reaching the boundaries of its non-compete agreements and address whether or not such agreements are enforceable for independent distributors. MonaVie believes that all direct selling companies should allow distributors to work for any company they choose.

“Non-compete agreements are meant for corporate executives, not for independent distributors who pay their own expenses, taxes, and healthcare,” continued Mr. Larsen. “We hope the court will dismiss Quixtar’s lawsuit and allow independent distributors to focus on making a living so they may support their families in these tough economic times.”

We have been covering this story every since it broke. Within a week of the lawsuit being announced, MonaVie announced that it completed a transaction to take in more capital and then filed an initiative to help protect independent distributors. Both moves appear to be defensive but also help strengthen the position of MonaVie who needs some deep pockets to go up against the 800 pound gorilla of the Amway gorilla.

“Poaching” in this industry is not uncommon and while I am not going to “out” any companies for the practice, it exists and it will continue to exist so long as there are opportunistic incentives for people to leave one company for another. Make no mistake about it, this is a business about people. The product is what is sold but the business is about the people who sell them. If you don’t have the right people, you cant expect to be successful in MLM - regardless of whether the product is the “best” in its category or not. The reverse can not be said.

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