From the FTC: On March 25th, Acting Federal Trade Commission Chairwoman Rebecca Kelly Slaughter announced the creation of a new rulemaking group within the FTC’s Office of the General Counsel. The new structure will allow the FTC to take a strategic and harmonized approach to rulemaking across its different authorities and mission areas. With this new group in place, the FTC is poised to strengthen existing rules and to undertake new rulemakings to prohibit unfair or deceptive practices and unfair methods of competition. Especially given the risk that the Supreme Court substantially curtails the FTC’s ability to seek consumer redress under section 13(b), rulemaking is a critical part of the FTC’s toolbox to stop widespread consumer harm and to promote robust competition.
Sharing Services Global Corp. (SHRG) has rebranded its direct selling division, Elevacity, as The Happy Co., a seller of nootropic coffee products. The newly titled brand also received a $30 million investment increase from its largest shareholder, Document Security Systems Inc. and has obtained its direct seller’s license in South Korea, as part of its Asia Expansion Plan. In addition, SHRG plans to launch a travel company to add to its direct selling arsenal and announced Jonathan McKillip as president of this subsidiary focused on providing exclusive benefits and first-class discount travel opportunities to its brand partners and customers.
RBC Life Sciences, an Irving, Texas-based nutritional and wellness direct selling company, has been referred to the Federal Trade Commision (FTC) by the Direct Selling Self-Regulatory Council (DSSRC). The DSSRC cited earnings and health-related, product performance claims made by salesforce members, including COVID-19 claims, as well as unrealistic earnings claims. The DSSRC also noted that RBC Life Sciences falsely represented Better Business Bureau accreditation and Direct Selling Association membership. The DSSRC finalized its referral after RBC Life Sciences failed to respond to its initial inquiry from December 2020.
The U.K.’s regulator of advertising, the Advertising Standards Authority (ASA), has banned three influencer Instagram ads that utilize digital beauty filters. The action was in response to the #filterdrop campaign drawing attention to deceptive use of skin filters in marketing campaigns. In its ruling against Skinny Tan and Tanologist Tan, the ASA stated that the use of filters is not inherently problematic, but warned advertisers not to mislead customers through exaggeration.
After becoming a premier partner of the National Park Foundation’s Resilience and Sustainability program in October 2020 with a $1 million donation, the Tupperware Brands Charitable Foundation, the non-profit division of Tupperware Brands, announced a plan to install water bottle refill stations in national parks, diverting 10 million single-use plastic bottles from landfills. The Foundation will also enhance park infrastructure and education to encourage composting and recycling inside the parks and will support increased park capacity.
Signifying the end of the Carl Icahn era, Herbalife announced three additions to its board; Sophie L’Hélias, founder and president of LeaderXXchange and lead independent director of French luxury-good company Kering SA; Kevin M. Jones, CEO of Rackspace Technology Inc.; and Don Mulligan, former CFO of General Mills, Inc. Two current board members, Michael Montelongo and Margarita Paláu-Hernández, will resign their seats in April at the 2021 Shareholders Meeting, bringing the new board member count to nine. Herbalife also made news by appointing its first ever chief digital officer, Joe Miranda, who will be tasked with facilitating digital transformation and innovation for the global nutrition company . Miranda was previously the chief digital officer for Thomson Reuters. “The creation of this new position will allow the company to deliver exceptional digital experiences for our distributors, customers and employees,” said Frank Lamberti, executive vice president distributor and customer experience of Herbalife Nutrition.
WorldVentures was granted a Temporary Restraining Order (TRO) against its former president Eddie Head on Feb. 26. WorldVentures maintains that Head, who left the company in late 2020, violated a non-compete by joining Seacret Direct LLC. to build its travel program. Head is not prohibited from working for Seacret. However, the TRO prohibits Head from participating in multi-level-marketing-based travel businesses. In a March 9 statement, Seacret Direct countered, “We are stunned over WorldVentures’ continuing and blatant mischaracterization of the relationship between our two companies, and we will forcefully and definitively defend ourselves and our integrity, largely through timely and appropriate disclosure to the court of documents and communications made and signed by WorldVentures and its management.”
The world’s largest direct selling company, Amway, announced it is cutting 900 jobs—representing about 6 percent of its workforce. Most of the cuts will be workers at its Ada Township headquarters in Michigan. Amway CEO Milind Pant specified the company’s increasing investment in its wellness portfolio and improvements in digital capabilities as the catalyst for the “voluntary separation plan.”
Last Friday, West Virginia Governor Justice signed into law a bill that will provide more clarity that individual direct sellers are independent contractors for wage and hour, workers’ compensation, and unemployment compensation.
The bill incorporates the IRS Code section defining individual direct sellers as statutory non-employees. Language was amended into a broader bill dealing with independent contractor status. 42 states now have specific language designed to ensure the proper status of direct sellers. See more at dsa.org.