A review of Lawsuits against Amway/Quixtar

A court of appeals upheld an order by a trial court, denying a motion to dismiss a lawsuit against Amway.   Amway is being sued by two of its reps or IBOs (Independent business owners) as they call them. These two reps are alleging that Amway is operating an illegal pyramid scheme.

Amway tried to have the lawsuit dismissed and tried to force their reps into private arbitration, where of course they would have a huge advantage. Amway’s contention is that this is what the reps agreed to when they signed up, but the court agreed that the agreement was unconscionable.  In other words, it was just wrong!

The court pointed out that this was not like a mutual agreement.  It was more like a giant corporation taking advantage of a bunch of individuals. Basically they were saying if you want a chance at riches by selling our products, do what we say or take a hike because we don’t need you. Amway was in charge of the dispute resolution process, which gave it another unfair advantage.

They even went so far as to prevent the reps from talking about their claims, why they made the claim, the evidence that they had against the company and the outcome of the claim.  They really had these reps hands tied. Now Amway has to go to court it has a problem with a rep instead of using a private arbitrator. It might also be a good idea for them to change their agreement to prevent future problems.