Judge rules against Amway
Posted on 29. Oct, 2009 by Dan Mitchell in Amway
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Source: WoodTV
GRAND RAPIDS, Mich. (WOOD) - A federal judge has ruled against Amway Corp. in a class-action complaint filed by 27 former salespeople, or independent business owners.
The ruling says Amway must stop forcing its one-time distributors into arbitration over disputes between the two parties.
The independent distributors had filed a complaint against Amway asking the court to stop Quixtar, Amway's e-commerce business, from "harassing and intimidating plaintiffs ... with repetitive arbitrations asserting trumped up violations of Quixtar's unilaterally-enacted ... trade secret rules."
According to the complaint, when potential independent business owners, or IBOs, start up with Quixtar, they sign a registration form that lists the company's rules for engaging in "arbitration" as a means of resolving disputes.
But the court ruled the agreement to arbitrate did not extend to "post-termination disputes involving former IBOs who are no longer operating an Amway 'Independent Business.' "
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