FTC ISSUES RULE PROHIBITING NON-COMPETES

On April 23,2024, the Federal Trade Commission (FTC) issued a final rule intended to ban the use and enforcement of most non-compete clauses signed by workers. Importantly for direct sellers, the rule applies to their distributors. Unless the worker is a senior executive, non-competes will soon be unenforceable nationwide - provided the rule withstands challenges by business groups.

FDA to Delay Enforcement of Facility Registration and Product Listing Requirements under MoCRA

FDA delays enforcement of cosmetic facility registrations and cosmetic product listings until July 1, 2024.

Proposed Amendments to the FTC’s Negative Option Rule and Potential Impact on Direct Sellers

On March 23,2023 the FTC published a notice to amend the Negative Option Rule (16C.F.R. §425). At first blush, the proposed amendments to the Rule seem reasonable and fair. But direct sellers must BEWARE! There’s a seemingly innocuous element to the proposed amendments that negates a defendant’s ability to contest injunctive relief and damages.

MoCRA - A Not So Tasty Treat for Cosmetic Manufacturers & Distributors

If you are involved in the manufacture or distribution of cosmetic products in the U.S., you may have recently heard of MoCRA. If you haven't, read on. (Hint: It’s not some tasty new drink at Starbucks.) [...]

Dietary Supplement Marketing - Rethinking The use of 3rd Party Material

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Bigsmart Not So Smart

Get Your Hands Off My Downline!!!

If God had been running an MLM rather than delivering the Jews from Egypt, the first of the Ten Commandments given to Moses would have been "thou shalt not steal thy neighbors downline." [...]

FDA Promulgates New Standard for Dietary Supplement Health Claims

Intellectual Property - What is it?

To the law, property is commonly considered a “bundle of rights.” This “bundle” is [...]

Seeing The Forest For The Trees

"Is my plan legal?" Not a week goes by that I'm not asked this question.

Double Trouble

Binary compensation plans have become the darling of startup multilevel marketing companies. From the distributors’ standpoint, binaries have a lot of sizzle. They are relatively simple to understand and offer fast-paced growth opportunities [...]

Training Camp

Several very visible companies have successfully incorporated training bonus programs into their plans. They are typically presented as a second compensation structure dedicated to training. As a result [...]

Door-to-Door Sales

This article will address the legal issues surrounding "door-to-door" sales in the United States. Lest you think that the activities of your distributors do not involve "going door-to-door," you should be aware that the federal definition (as well as most state definitions) of a "door-to-door" sale encompasses [...]

Income and Earnings Representations

Let's face it - distributors are out there waiving checks and 1099s, telling prospects what they and others have made, and presenting hypothetical (i.e., astronomical) examples of the phenomenal incomes that can be earned with your company [...]

The FTC's Proposed Business Opportunity Rule

There has been a lot of chatter in direct sales circles about the FTC's new proposed business opportunity rule.

The Preminence of Value

Securities Law and MLM - What's the Deal

No one will claim that the application of securities law in the multilevel marketing field is anything new. Securities laws have been regularly applied to the MLM industry at both the state and federal levels since the early 1970s, and many MLM programs have been found to cross the line into the realm of unregistered securities since that time [...]

Customer Programs

Environmental Marketing

This issue of SalesWatch will examine the history and status of environmental marketing claims, and the enforcement activities of the Federal Trade Commission ("FTC") in this arena [...]

Dietary Supplement Marketing - Rethinking The use of 3rd Party Material - The Sequel

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