In a crushing defeat for MonaVie, an arbitrator in Utah has ruled that MonaVie must pay a former MonaVie distributor $1,215,000 plus cost for wrongfully terminating the distributor’s contract and for breaching its duty to act fair and in good faith.
The arbitrator also found that a provision in MonaVie’s Policies & Procedures that limited a departing distributor to receiving only a part of his commissions, called Executive Check Match, was an unenforceable provision and was inconsistent with the manner in which MonaVie entices distributors to join it.
In April of 2012, MonaVie distributor Joe Licciardi decided to pursue another multilevel marketing program. He informed MonaVie of his decision. It was LIcciardi’s intent to benefit from the residual income produced from his MonaVie position while at the same time pursuing another income opportunity. Within two weeks of Licciardi’s decision, MonaVie terminated the Licciardi position and moved his entire downline organization under other distributors. Then MonaVie filed a lawsuit against Licciardi claiming that he violated the MonaVie non-solicitation provisions by posting his new MLM company on his Facebook page.
The first indication that MonaVie had acted wrongly came from Federal District Court Judge Clark Waddoups. After a full day evidentiary hearing, Judge Waddoups denied MonaVie’s request to enjoin Licciardi’s Facebook posts regarding the other MLM company. In so ruling, Judge Waddoups questioned whether MonaVie owned the distributor’s downline position or whether it was the distributor who should own the goodwill of the downline position.
The second phase of the case was an arbitration in which Judge Robert Hilder (retired) determined that MonaVie had breached its contract with Licciardi by terminating him and dismantling his downline. Judge Hilder also determined that MonaVie had breached its duty to act in good faith and fairly. The last phase of the case was arbitration on damages. In this phase, Judge Hilder found that the value of the Licciardi distributorship taken from him by MonaVie was three times its annual earnings and awarded Licciardi $1,215,000 plus costs.
When asked how he felt, Joe Licciardi stated, “It’s been a long time, but I was committed to see the right thing done. The days of MonaVie bullying distributors and simply confiscating their hard earned work should be gone forever.”
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