Direct Sales and MLM

Rick Gutman, MonaVie Black Diamond, moves to Visalus Sciences

By
Kevin Thompson

In a video post, MonaVie Black Diamond, Rick Gutman, announces his new alliance with ViSalus Sciences. ViSalus has been making a lot of noise lately given their recent surge in growth. ViSalus is trying to mold itself as MLM 2.0 for the younger generations...and it seems to be working. Their recent score of Rick Gutman will certainly put them in the cross-hairs of one of the industry's largest companies. After watching Rick's announcement, the lawyer in me wondered if there was going to be an issue with MonaVie's noncompete clause. As I was referencing their policies, I learned that their noncompete does NOT extend beyond termination of the agreement. The language can be found below.2.3.4 Sale of Competing Goods or Services. While a Distributor, you shall not sell, or attempt to sell, any programs, products, or services to MonaVie Customers or Distributors that compete with our Products. Any program, product, service, or Network Marketing opportunity in the same generic categories as our Product is deemed to be competing, regardless of differences in cost, quality or other distinguishing factors.. . .Rick Gutman, unless he's wildly soliciting everyone in his database, appears to be in the clear.One thing about MonaVie, love 'em or hate 'em, is that when the distributors leave, there's not much litigation. This is surprising given their itchy trigger finger when they made a legal threat at Ted Nuyten. In August of 2010, they threatened Ted with litigation after reporting on their decline in revenue in 2010. Specifically, they accused him of knowingly publishing false information with an intent to defame and disparage. In August of 2010, Ted projected a 25% decline in 2010 revenue from 2009 numbers. They demanded that he retract his statements and write "that such statements and figures were and are false and unsupported by fact." Ted put the legal threat on his site here. In the original article that got him trouble, he literally provided two numbers: $785 million in 2009 and he projected $600 million in 2010. MonaVie alleged that a $600 million projection was "defamatory" and harmful to their reputation. In this month's Direct Selling News magazine, they publish MonaVie's revenue for 2009 and 2010: $785 million for 2009 and $600 million for 2010. The man was spot on the money...to the digit. "False and unsupported by fact..." Really?

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