On July 19, 2008, Bob and Anna Bassett were honoured to be guests of Richard Dennis on a Saturday evening Mentoring For Free Skills Call. To listen to that call, click here: Policies and Procedures with Bob and Anna Bassett.
Here we are again with another entry into the ongoing saga of the importance of Professional Network Marketers reading their Policies and Procedures. It will be important for you to know if you are in a company that really does have the integrity that most boast and claim to have. Below are several more “Way Out There and Waz’up With That? clauses”. If you take the time to read yours you may find yourself asking “what the ^@() was that all about?” “Can they really do that?” You will be shaking your head more than once if and when you do finally take the time to read your contract. The Company never gives up its right to insist on compliance with the Agreement and with the applicable laws governing the conduct of a business.
In the clause below, from an actual network marketing company’s contract, it is explained in their P n P’s that it is YOUR RESPONSIBILITY to read your Policies and Procedures. Just exactly what we have been telling you, but now here it is in writing from a company, written by lawyers.
SECTION 2 – INTRODUCTION
2.1 – Policies and Compensation Plan Incorporated into Distributor Agreement
These Policies and Procedures, in their present form and as amended at the sole discretion of [Company], Inc. (hereafter “[Company]” or the “Company”), are incorporated into, and form an integral part of, the [Company] Distributor Agreement. Throughout these Policies, when the term “Agreement” is used, it collectively refers to the [Company] Distributor Application and Agreement, these Policies and Procedures, the [Company] Marketing and Compensation Plan, and the [Company] Business Entity Registration Form (if applicable). These documents are incorporated by reference into the [Company] Distributor Agreement (all in their current form and as amended by [Company]). It is the responsibility of each Distributor to read, understand, adhere to, and ensure that he or she is aware of and operating under the most current version of these Policies and Procedures. When sponsoring or enrolling a new Distributor offline, it is the responsibility of the sponsoring Distributor to provide the most current version of these Policies and Procedures and the [Company] Marketing and Compensation Plan to the applicant prior to his or her execution of the Distributor Agreement.
“Way Out There and Waz’up With That?
What Michael is teaching and Bob and Anna have discovered through their analysis is that the Red Flag Clauses of PNP’s fall into five major categories:
1. Readability and Length
3. Ongoing and Increasing Responsibility
4. Unusual, Vague or Bizarre Responsibilities
5. “Way Out There and Waz’up With That? *
The fifth category we are looking at today is:
* “Way Out There and Waz’up With That? clauses. Reminder these are clauses from actual legal Policies and Procedures of some Network Marketing Companies
- If any provision of the Agreement, in its current form or as may be amended, is found to be invalid, or unenforceable for any reason, only the invalid portion(s) of the provision shall be severed and the remaining terms and provisions shall remain in full force and effect and shall be construed as if such invalid, or unenforceable provision never comprised a part of the Agreement.
It’s my ball and I am going home with it. I make the rules when and how I want, if I see that the rule does not work at any given time the company can change it so it does to benefit the company…my game, my ball, my rules…COMPANY WINS. Waz’up with that?
- In order to maintain status as a distributor, the distributor, spouse, family, household member, or distributor’s business partner are required to not actively participate in any other network marketing or direct sales company.
Does this sound like “The Martial Law” of MLM’? WAY OUT THERE!
- The distributor must fully, at all times, disclose the fact of ongoing income being received from any other network marketing or direct sales company.
Ok, look at it like this…I work as a government employee, obviously with bosses. My boss is requiring me to brief her of my earnings from my MLM company. I don’t think so, “What is Up with That”? There is no job on the planet that would require you to disclose your income of a second job. MLM companies controlling you and your every move… “Way Out There!”
- Any associate determined to have an unusually high turnover ratio will be subject to termination at the sole discretion of the Company.
Who defines ‘unusually high’? Oh yeah it is at the sole discretion of the company. So what is a guy to do? Place some kind of surveillance in the company office to stake out the company records to see if my turnover is out of the established norms?
- The Company may develop from time to time procedures for Associates to partially or fully guarantee deposits for new customers. Should an Associate provide such a guarantee, the Associate’s commissions may be applied to cover the guarantee amount in the event of a customer payment default.
The critical thinking distributor will become distrustful of the company. In layman’s terms this clause means…if your customer does not pay, you are going to, you are responsible! Imagine you are at a restaurant having a dinner meeting with one of your upline sponsors. You get to talking about this clause because one of your customers did not pay and your company requested payment from you..and the company gets it because they withhold it from your commissions check. In the booth behind you is a neighbour who is also a customer. Light bulb moment for him..times are tough, I can’t pay my bill but that is ok the my neighbour will pay it for me. He has to and he has done it for other customers too already. Why would he bother paying his bill when he knows you will do it for him? You signed it! How generous of you!
- Distributors are free to participate in other multilevel or network marketing business ventures. However, during the term of this agreement, distributors may not recruit other Company distributors or customers for any other network marketing business. Following the cancellation of this agreement for any reason, and for a period of six months thereafter, a former Distributor may not recruit any Company distributor or customer for another network marketing business if that distributor or customer was in the former distributor’s downline, or the former distributor met, developed a relationship with, or gained knowledge of the distributor or customer by virtue of their mutual participation in the Company. The term “recruit” means actual or attempted solicitation, enrollment, encouragement, or effort to influence in any other way, either directly or through a third party, another Company Distributor or customer to enroll or participate in another multilevel marketing, network marketing or direct sales opportunity. This conduct constitutes recruiting even if the distributor’s actions are in response to an inquiry made by another distributor or customer.
This clause is a shocker to me, as I imagine you are amazed at some of these clauses presented to you today. Layman’s terms please…if you leave a company because you are fed up with making no money, and a former fellow rep in the company, also fed up with making no money, asks you what you are doing now, you are prohibited, by law of this contract, from telling your fellow fed up rep for fear of prosecution or persecution by the company. That is dependability right there. If the company finds out you can depend on the fact that they will enforce this clause at their sole discretion.
The company controls you while you are with them and the company controls you after you leave them. Bizarre, Amazing, Way out there!
Incidentally, the only way people can be ‘cross-recruited’ is if they are not happy where they are. When a company includes many clauses forbidding cross-recruiting, it is an admission that they intend to treat you poorly and/or underpay you. If you are being treated with dignity and respect and being paid fairly, you will not leave your company for another. ~ Bob and Anna Bassett
- If a family member acts in a way that would violate policies if they were a representative, the company will regard such action as an action of the representative, and the representative will be subject to termination.
Translation please…This means that if your crazy controlling mother-in-law or crazy separated loony tunes spouse makes a negative (disparaging) remark about the company, you are a toasted pop tart.
- The distributor also agrees to waive any and all rights to “stop payment” or to “charge back”.
Waz’up with that? This is flabbergasting. Translation…you have paid for a product or service from the company and if you are not happy with it, you do not have any grounds to request your money back. Why is it that we as distributors are so naive to think that this is a company whose management team is running the whole shebang with integrity and dependability? The company is subjecting you to forfeit and give up the same rights you have with every other business in the real world today.
- Any controversy or claim arising out of or relating to the Agreement, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Distributors waive all rights to trial by jury or to any court. All arbitration proceedings shall be held in the city of the head office of the Company.
Whoa again! This means that if you have a problem, you have to get on a bus or a plane and travel a few states or provinces away to sit in front of an arbitration panel with no recourse to a judge or jury or any court at all. You might as well save the bus fare and give up right now. BOHICA! Bend over – here it comes again! ~ Bob and Anna Bassett
Taking the time to review and read your contract will undoubtedly shed a little light on the integrity and dependability of the company management team. With clauses like the above written in your contract, you may want to look past the fancy, pep rally video presentation toting how great the company management is, and look at the the company Policies and Procedures. Just because the Management team are family people with several families to prove it does not indicate how much integrity the company management team has.
We hope this has at any rate gotten you to consider reading your P n P’s to see if your company has written any of these gotcha clauses into your contract. These clauses above should have caused shock and angry as it did for us. As we learn more about how most companies have their hands in your pockets, the distributor’s, it is amazing to learn how the company has set themselves up with all the fancy protection from the legal teams writing abilities. But also of most importance is the fact that you the distributor have forfeited your right to protect yourself against the most basic of rights…the reps right to fight back.
To Your Success
Dave and Darlene Mills
Leadership with a vision