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Max International will pay Melaleuca Inc. $1.2 million to settle a lawsuit that accused Mad of poaching members of Melaleuca’s independent sales force.
The lawsuit, filed in November, 2009, sought more than $10 million in damages from Max. It charged that Max and one of its distributors offered “exorbitant payments” as enticements to “highly compensated” Melaleuca independent sales agents to get them to leave Melaleuca and join Max.
The suit also charged the Max and some former Melaleuca sales agents conspired to recruit agents, violating non-solicitation clauses of Melaleuca agreements that prevent former Melaleuca employees from soliciting customers for one year after leaving Melaleuca.
Following a public comment period, the Federal Trade Commission voted 5-0 to finalize the order settling charges that Dannon exaggerated the health benefits of its Activia yogurt and DanActive dairy drink, two products that contain beneficial bacteria known as probiotics.
Under the settlement, Dannon agreed to stop claiming that Activia relieves temporary irregularity, unless the representation is non-misleading and the ad conveys that eating three servings a day is required to benefit, or unless Dannon has competent and reliable scientific evidence that the benefit can be achieved from eating less than three servings a day.
Dannon also agreed to stop claiming that DanActive or any yogurt, dairy drink or probiotic food helps people avoid catching colds or flu, unless the claim is approved by the FDA.
Dietary supplement marketers need to be on the look-out not only for the FDA and the FTC, but for consumer protection organizations as well. Most recently, the National Consumers League sent a letter to the FTC urging the agency to take action against VitaminWater.
The NCL calls VitaminWater advertising and labelling claims “deceptive” and “dangerously misleading” and is urging the FTC to stop the manufacturer’s continued use of them.
The complaint cites VitaminWater promotions that say “flu shots are so last year,” implying, the NCL believes, that VitaminWater is being promoted as product that can replace flu shots or prevent illness.
In a television ad, a woman is shown at home watching TV instead of at work because VitaminWater helped her become healthier so that she can use unused sick days to play hooky instead of being ill.
The NCL complaint also wants the FTC to stop label statements for VitaminWater that describe the product as a “nutrient enhanced water beverage” and that claim “vitamins + water = all you need.”
According to NCL, the statements are deceptive because VitaminWater is more than just vitamins and water, but also are made with crystalline fructose or other forms of sugar, and contain 125 calories per bottle.
The FTC has not yet responded to NCL’s complaint.