An arbitrator has awarded a former MonaVie top distributor $1.2 million, ruling the Utah-based multilevel marketer of nutritional fruit juice breached a contract when it locked out Joseph Licciardi.
MonaVie is appealing.
The arbitration award was posted as part of a lawsuit in which MonaVie and Licciardi have sued each other over his sudden dismissal in 2012, after he informed the South Jordan company he planned to work for another multi-level marketing (MLM) company.
MonaVie claimed Licciardi breached its distributor agreement by soliciting his MonaVie proteges to move over to his new company, called Momentis. He, in turn, sued MonaVie, alleging he was improperly dismissed because working for more than one MLM is allowed by company rules.
The competing claims were sent for arbitration to retired Utah District Judge Robert Hilder. He held that MonaVie breached the agreement in hastily terminating Licciardi’s distributorship and not allowing him any time to “cure” possible violations.
“MV’s breach of the express terms of the contract is compounded by its breach of the implied covenant of good faith and fair dealing,” Hilder wrote, adding that as a result, Licciardi was owed damages based on the fair market value of his distributorship.
Hilder found Licciardi’s average income from 2010 and 2011, minus expenses, was $405,000. He then multiplied that by three to come up with the $1.2 million loss award.
Licciardi expressed satisfaction of the outcome of the arbitration.
“The days of MonaVie bullying distributors and simply confiscating their hard earned work should be gone forever,” he said in a statement released by his attorneys.
A statement from MonaVie spokesman Eric Eames said: “While we respect the arbitrator’s authority, we believe the arbitration award was entered in error and have already noticed our right to appeal this award. We have full confidence that upon review the award will be reversed.”
The company also faces another lawsuit over its employee stock ownership program.
Bankers Trust Co. of South Dakota, which administers the retirement program, says MonaVie is not paying the bank’s legal bill as required under their contracts.
Those legal bills result from a U.S. Labor Department investigation of the program — described in the complaint as routine — and a proposed class action lawsuit.
The latter lawsuit alleges MonaVie, with participation of Bankers Trust, greatly overvalued its shares when it sold them to the employee stock ownership plan (ESOP). The shares soon lost most of their value, depriving employees of promised retirement rewards.
Besides its legal bills, Banker Trust wants a declaration that MonaVie is liable for any damages it is assessed as part of the ESOP lawsuit.
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