Is your MLM Company threatened by a former distributor who is cross-recruiting from your downline? The majority of MLM companies face the threat of cross-recruiting from a former distributor; however, once you are faced with this difficult situation, it is imperative to know who you can to turn to for legal support. Wellman & Warren is here to help! We can help you decide what steps to take, allowing you to make the best decisions for your MLM Company and your future.
In fighting this situation, it is vital for any MLM Company to protect their assets by ensuring their distributor lists are trade secrets of the company and protected by the Uniform Trade Secret Act. Essentially, this Act will entitle the MLM company in question to an injunction prohibiting any use of the list to solicit or recruit –and at times, from even contacting—distributors. The Act will also entitle the wronged MLM Company to any damages such as lost profits.
Fortunately, in the event the distributors of your MLM Company are not protected trade secrets, there are still other options for your company to protect your assets. At the first sign of cross-recruiting, it is important for us to send a cease and desist demand letter. Frequently, the prospect of litigation, with its long drawn out process and multitude of expenses, will deter the offender from continuing to poach your distributors. In the event, the demand letter is insufficient; Wellman & Warren is here to help through the litigation process. We have a long history of successful case settlements, avoiding the massive expenses involved in litigation for our valuable clients. Even when a former distributor agrees to stop poaching your current lists, your MLM company should not settle the case unless the stoppage is backed by a stipulated injunction whereby the former distributor is under a court order to stop his or her offending activities.
Any former distributor cross-recruiting your current distributors can have long-lasting detrimental effects on your MLM Company. It is vital when faced with this threat, that your MLM company take the necessary steps to combat the problem at hand. Here at Wellman & Warren, we put your company and its interests as utmost importance, protecting your company’s future. For more detailed information and other ways to protect your MLM Company in the event of cross-recruiting, please visit What Can an MLM Company do when a former distributor cross-recruits?