Definition: IBO - Independent Business Owner
This is the term Quixtar and Amway uses to name their distributors.
It sounds a lot more impressive than "distributor", doesn't it?
Amway and Quixtar have long prided themselves on being the bastion of free enterprise
and individual capitalism. In the late 1990's Amway changed the name from
"distributor" to "IBO" to give everyone the impression they are
working for themselves and not just the corporation. IBOs love to claim that they
are not being controlled by anyone else. It is s common practice when
recruiting new people to the business to point out the risks of being fired when one is an
employee of a company. One of the benefits of being an Independent Business
Owner is that you can't be fired like you can from a job....right....
Recent rule change in the "Independent Business Owners Rules of Conduct"
would suggest that IBOs are not independent as they lead their prospects to believe.
In March of 2005 Diamond Bruce Anderson lost
his business when the Amway/Quixtar arbitration company JAMS/Endispute in private court
reversed a public court judgement that Anderson had won against Hal Gooch.
At the end of 2004 numerous Independent Business Owners in the Team ANS line of
affiliation were terminated from Quixtar for their involvement in another MLM company
called Oasis Life Sciences.
The Sapphires Stephen & Wendy Weil, Q12 Richard & Lee Moore, Platinums John
& Celia Moye, and Anthony & Debra Underwood were terminated under the
"non compete rule" in the Rules of Conduct enacted in May 2004.
Their Diamond was apparently given the option to quit or be terminated for rules
violations, so technically the Diamond resigned. The Diamond
earlier professed that he would never be "downsized again", since the
Quixtar business could not do that to him. He unfortunately learned the truth the
hard way that Quixtar could "downsize" him for wanting to diversify his income
with another MLM business.
It is strange the Diamond would resign a residual  six figure
income, that only cost him $200, by trying to diversify his six figure income
with another MLM. I'm not greedy. I could live on a six figure residual
income. Maybe this is just proof that no income in Quixtar is residual, and even if
one was once a diamond, it doesn't mean you can continue to have a terrific income with
little or no work like the IBOs would like you to believe.
This is not the first time a group of Independent Business Owners have been "fired"
from their Amway/Quixtar employer. Three diamonds in the "Team In Focus"
line of affiliation were also "fired" when they attempted in share the
tools income with everyone in their downline. The diamonds were Andy & Polly
Andrews, Gerry & Sharon Betterman, and Gayle Collinsworth. Numerous other
diamond resigned their "six figure incomes" as well and left the business in
protest with them.
There are few other documented cases which also show that IBOs are not independent:
In the Baker case from 1992, Amway removed two
profitable legs from the Baker's business and gave them to another distributor...without
asking. Amway at a whim waved its own "6-month inactivity rule",
which was expressly put n place to prevent such moves thereby protecting distributor's
income potential. Joan Baker sued Amway for breach of contract and won. Amway tried cited
Rule 4 violations to justify the transfer but none such violations were proven in
court.
In two documented cases Amway stopped paying already earned bonuses to a double diamond and an emerald to cut off their income and force them
to do what the company wanted.
In another case the Gommeringer's crown
distributorship was terminated for not paying their $12 renewal fee on time despite the
fact that Amway had a policy of accepting renewals late for an additional $4 fee. The
Grommeringers claim to have paid the fees in September of the year before they were
notified their distributorship was terminated. Plaintiffs claim Amway incited other
distributors to file "419s" complaints against them.
Yet Another Crown Distributor Leonard Hall was given
the boot in the early 1980's for selling his tools to other lines of sponsorship; a
practice now approved by Amway/Quixtar.
It seems however Quixtar does pick and choose the distributor's it chooses to fire.
Don Storms was deeply involved in promoting the illegal 4NExchange pyramid scheme, in which IBOs lost millions.
The corporation had suspended Storms for a while, but Quixtar let him quietly slip back
into the business. Don has very good connections in the company and with Dexter Yager.
As of 2007 Don Storms was involved in another MLM business.
In the fall of 2007 numerous IBS
diamonds were denied the opportunity to renew their "independent" business
with Quixtar, throwing away 25 years of business building.
In 2007 Quixtar states to platinum distributors that some of their bonuses are paid at
the sole discretion of Quixtar and that if the distributors don't like it they may seek
conciliation through Quixtar's
dispute resolution process.
Quixtar/Amway employ numerous rules in their 100 page
Compendium  that would imply that IBOs are anything but independent.
I don't know any employer that has a 100 page rule book. Here are a few of
the rules that dictate how the "Quixtar IBO contract employee" has to work and
behave.
4.3. Retail Stores: No IBO shall permit the Corporation’s products
or services to be sold or displayed in retail stores, schools, fairs, PXs, ships, or
military stores; nor shall he or she permit any of these products to appear in such
locations even if the products or services are not for sale. No corporate literature shall
be displayed in retail establishments.
4.3.1. An IBO who works in or owns a retail
store must operate his or her IB separate and apart from the retail store. Such IBOs must
secure Members and Clients in the same manner as IBOs who have no connection with a retail
store. Other types of retail establishments, which are not technically stores, such as
barber shops, beauty shops, or professional offices, etc., likewise may not be used to
display products, information about services, or literature from the Corporation.
4.3.2. Further, IBOs may not use any broadcast
communication methods including mass mailings, telemarketing, national or international
advertising, radio, television, facsimile services, computer communication networks
including the Internet, or any other means by which personal contact is not present to
secure Members and Clients or to solicit the sale of products. However, IBOs may use
digital media or maintain a Web site to order products or to have their Members and
Clients order products, provided such media or Web site meets the requirements set out in
the IBO Prospecting/Product Sales Web Site Bulletin, and otherwise complies with
the Rules of Conduct.
4.10. Unlawful Business Enterprises or Activities: No
IBO may operate any illegal or unlawful business enterprise, engage or participate in any
illegal or unlawful business activity, or be convicted of any illegal or unlawful
activity.
4.10.1. An illegal or unlawful enterprise or
activity is one which (1) is prohibited by federal, state, or local law or regulation, or
(2) has been determined as such by federal, state, or local law enforcement officials, or
(3) has been reasonably determined as such by the Corporation. In making a reasonable
determination, the Corporation shall obtain the opinion of outside legal counsel and the
IBOA International Board Hearing Panel Chairperson.
4.14. Other Selling Activities: No IBO who
personally sells products other than the Corporation’s products, who personally sells
literature or sales aids not produced by the Corporation, or who sells services (e.g., tax
services, insurance, investments, etc.) will induce another IBO whom he has not personally
registered to sell such products, literature, sales aids, or services, or shall he or she
offer to sell such products, literature, sales aids, or services to any IBO except those
personally registered by him or her. Induce means persuade (to suggest or attempt to
persuade) another IBO whether or not this is done to obtain revenues or for any other
reason. IBOs may engage in other selling activities related to
non–Corporation-approved or non–Corporationproduced products and services if
they personally desire to do so, but they may not take advantage of any activity organized
to promote the Corporation’s products or the Corporation, or any other IBO’s
efforts or resources, or of their knowledge of, or association with, other IBOs,
especially those not personally registered by them, to promote and expand their other
selling activities. To do so constitutes an unwarranted and unreasonable interference in
the business of other IBOs. This does not mean, however, that an IBO regularly engaged in
the operation of a gasoline station, repair garage, retail establishment, barber or beauty
shop, or a professional service (law, medicine, dentistry, or accounting) may not serve
clients or customers who are IBOs and have sought them out, but it does mean that such
IBOs may not actively solicit the patronage of other IBOs who are not personally
registered by them.
4.16. Exporting the Corporation’s Products: No
IBO may export or import, or knowingly sell to others who import or export, the
Corporation’s products from the United States or its possessions or territories, or
from any other country in which it has established operations, into any country regardless
of whether or not the Corporation is doing business in that country.
4.17. Sound Business Practices: An IBO must
operate his or her IB in a financially responsible, solvent, and businesslike manner. The
Corporation shall have the right to take action against any IBO or IB that it knows or
reasonably believes is operating their IB in a financially irresponsible manner,
insolvent, or unbusinesslike manner.
4.24. Fund-raising: No IBO shall use Corporation
products in conjunction with any type of fundraising activity. Fund-raising includes the
solicitation for the purchase of Corporation products or services based on the
representation that all, or some, of the gains, proceeds, bonuses, or profits generated by
such sale will benefit a particular group, organization, or cause.
9.2.6. An IBO who operates an office shall not
service any retail Clients from the office since to do so would convert the office into a
store. If prospective retail Clients come into the office, they are to be informed that
the office is for wholesale only and an appointment made to call on them later at their
homes.
9.5.
Booth Displays: Booth displays of products and services must be approved individually
prior to IBO participation at a business event. No sale of product or services is
to take place at the function. IBOs may only display products at non-selling
business events. They may not use booths for fundraising, bazaars, Las Vegas nights,
arts/craft shows, Fourth of July celebrations, flea markets, etc. These events or any
similar events are aimed to promote on-the-spot sales of services and/or merchandise.
Likewise, IBOs may not set up booths at a shopping mall or other typical selling
venue. If however, the shopping mall is promoting a specific event which is limited in
duration (i.e., Builders’ Expo, May 10-12), then such approval may be granted. to do
so would convert the office into a store.
9.8. IBO Advertising: IBOs
wishing to use advertising media must submit their proposal in writing, along with a copy
of the proposed advertisement, to the Corporation for approval. The Corporation’s
approval is for one (1) year only. Except as provided in Rules 4.3.2 and 8.3.11, under no
circumstances may IBOs advertise or promote the Corporation’s products and services
or the Corporation’s business opportunity through the use of mass communication
methods such as radio, television, facsimile services, computer communication networks,
including the Internet, national or international advertising, or any other form of
promotion where the person-to-person nature of the business is not present.
11. Dispute Resolution Procedures (take up 13 pages
of the compendium)
|
| Letter sent to the terminated IBOs' downlines
This letter is being sent to
inform you of recent developments that will impact your Quixtar-affiliated Independent
Business. Normally, rules actions by the Corporation with specific IBOs are kept
confidential, but the rules permit the exception when the results affect other IBOs.
Regrettably, the Corporation was put
in the position of having to take rule enforcement action, terminating the contract
between Quixtar and Stephen and Wendy Weil, effective December 31, 2004.
After receiving complaints and
conducting an investigation, Quixtar determined that Stephen and Wendy Weil were in
violation of the following rules, due to involvement in a competing business, Oasis Life
Sciences: Rules 4.14, 4.27, and 6.5. These rules are included here for your reference:
4.14.Other Selling Activities: Except
as provided in Rule 6.5., IBOs may engage in other business ventures, including other
selling activities, involving products, services, or business opportunities not offered or
marketed by the Corporation. However, IBOs may not take advantage of their knowledge of or
association with other IBOs whom they did not personally register, including their
knowledge resulting from or relating to their individual lines of sponsorship, in order to
promote and expand such other business ventures. Such conduct constitutes an unwarranted
and unreasonable interference with the business of other IBOs and the Corporation.
4.14.1. Every IBO agrees not to
solicit, directly or indirectly, other IBOs whom he or she did not personally register in
order to sell, offer to sell, or promote other products, services, or business
opportunities not offered or marketed by the Corporation.
4.27. Privacy and Confidentiality:
All IBOs are required to abide by the Corporation's Privacy Policy with regard to IBO,
Member, and Client information, and its Confidentiality and Non-Disclosure Policy with
regard to IBO and IB information.
4.27.1 The Data Management Rule is
intended to protect the Line of Sponsorship (LOS) for the benefit of all IBOs, as well as
the Corporation. LOS information, i.e., information compiled by the Corporation that
discloses or relates to all or part of the specific arrangement of sponsorship within the
Quixtar business, including, without limitation, IBO lists, sponsorship trees, and all IBO
or IB information generated therefrom, in its present and future forms, constitutes a
commercially advantageous, unique, and proprietary trade secret of the Corporation
(Proprietary Information), which it keeps proprietary and confidential and treats as a
trade secret. The Corporation is the exclusive owner of all Proprietary Information, which
is derived, compiled, configured, and maintained through the expenditure of considerable
time, effort, and resources by the Corporation and its IBOs. Through this Rule, IBOs are
granted a personal, non-exclusive, non-transferable, and revocable right by the
Corporation to use Proprietary Information only as necessary to facilitate their
Independent Business as contemplated under these Rules of Conduct and as set forth in the
Confidentiality and Non-Disclosure Policy. The Corporation reserves the right to deny or
revoke this right, upon reasonable notice to the IBO stating the reason(s) for such denial
or revocation, whenever, in the reasonable opinion of the Corporation, such is necessary
to protect the confidentiality or value of Proprietary Information. All IBOs shall
maintain Proprietary Information in strictest confidence, and shall take all reasonable
steps and appropriate measures to safeguard Proprietary Information and maintain the
confidentiality thereof. An IBO shall not compile, organize, access, create lists of, or
otherwise use or disclose Proprietary Information except as authorized by the Corporation.
An IBO also shall not disclose Proprietary Information to any third party, or use
Proprietary Information in connection with any other businesses or to compete, directly or
indirectly, with the business of the Corporation. Use or disclosure of Proprietary
Information, other than as authorized by the Corporation, will cause significant and
irreparable harm to the Corporation, warranting an award of injunctive relief, including a
temporary restraining order and/or a preliminary injunction, specific performance, and
damages including costs, attorneys' fees, and disgorgement of all profits made as a result
of such unauthorized use or disclosure. An IBO shall promptly return any and all
Proprietary Information to the Corporation upon resignation, non-renewal, or termination
of his or her IB and shall thereafter refrain from any further use thereof.
6.5.Non-Competition and
Anti-Raiding: The Corporation and all registered IBOs share a competitive business
interest in maintaining the integrity of the Line of Sponsorship, which was developed
exclusively for the purpose of distributing products and services offered or marketed by
the Corporation and compensating IBOs for marketing and merchandising such products and
services. In order to protect these interests as well as those detailed in Rule 4.27.1.,
current and former IBOs must not use the Line of Sponsorship to sell, distribute, or
promote competing products, services, or other business ventures, or otherwise interfere
in the Quixtar business of other IBOs.
6.5.1 For purposes of
this Rule 6.5., "Compete" means to own, manage, operate, consult for, be
employed by, or participate as an independent distributor in (a) any other direct sales
program using a multilevel or "network" marketing structure, or (b) any other
enterprise that markets, through independent distributors, products or services
functionally interchangeable with those offered or marketed by the Corporation.
6.5.2. For purposes of this Rule
6.5., "IBO" means an IBO who is either currently registered or has been
registered at any time within the past two calendar years.
6.5.3. Every IBO agrees not to
Compete, directly or indirectly, with the business of the Corporation while registered as
an IBO.
6.5.4. Every IBO agrees not to
Compete, directly or indirectly, with the business of the Corporation in the U.S., Canada,
and all offshore markets operating under the North American Independent Business Ownership
Plan during the six-month period following (a) the voluntary or involuntary resignation,
non-renewal, or termination of that IBO's independent business, or (b) any violation by
the IBO of this Subsection 6.5.4., whichever is later.
6.5.5. Every IBO agrees not to
encourage, solicit, or otherwise attempt to recruit or persuade any other IBO to Compete
with the business of the Corporation.
6.5.10. Every IBO acknowledges that
violation of any subsection of this Rule 6.5. will cause significant and irreparable harm
to active IBOs and the Corporation, warranting an award of injunctive relief, including a
temporary restraining order and/or a preliminary injunction, specific performance, and
damages including costs, attorneys' fees, and disgorgement of all profits made as a result
of such unauthorized activity.
6.5.11. An IBO's obligations under
this Rule 6.5. shall survive and remain enforceable following the voluntary or involuntary
resignation, non-renewal, or termination of that IBO's independent business.
Please note
that IBOs whose affiliation with Quixtar has ceased may not promote another business, such
as Oasis, to existing IBOs, affiliated with Quixtar, for two years. In fact, under
Quixtars rules, their involvement in Oasis at all exposes them to possible immediate
injunctive and legal action.
The above mentioned business now
reflects a name change, indicating ownership has been taken over by Quixtar. Quixtar will
assume the responsibilities of Platinum in the short-term, so if you have any questions
for which you would normally call your Platinum, please call Jane Bruggink in Quixtar
Sales at (616) 787-4233.
Gary VanderVen
Director, Global Business Conduct & Rules |
