By: William M. Miller
Ensuring that a website is accessible is particularly important as compliance, or lack thereof, is frequently the subject of litigation.
In this digitally dependent world, the first contact that many consumers have with a company is through its website. As a result, more than ever, it is essential to have a website that complies with both United States and foreign laws, not only to safeguard potential and existing customers but also to avoid costly lawsuits that may result from non-compliance. Below are three questions every company should ask about its website.
By: Brent Kugler, Guest Contributor
Because many companies favor keeping transfer upon death policies in their consultant agreements, it is critical that these policies are drafted in a manner to not conflict with other key provisions in the agreement.
As important as it is to ensure that the transfer upon death provision does not conflict with or negate language in the consultant agreement, it is just as important for companies to avoid mistakes when facilitating the transfer of the business to the heir or beneficiary.
Many—some would even say a majority—of direct selling companies have provisions in their consultant agreements that allow a sales consultant to pass their business to an heir or
beneficiary upon their death. It’s a great marketing tool. How many jobs, professions, or business opportunities allow a worker to pass their hard work and success on to their children or heirs?
By: Robert G. Kreklewetz, Guest Contributor
Canada is often viewed as a natural extension of the American direct selling ecosystem: It has a common dominant language, similar culture, convenient land border and a market of over 38 million people.
While having many similarities, there are still unique legal and regulatory features that prove to be risk areas for direct selling businesses operating in Canada. But all of this can be easily avoided with the right planning, structuring or advice, including an appropriate “Canadianization” of Plan Documents and overall business strategies.
Below, is a review of five recent Canadian developments that direct selling companies operating (or thinking about operating) in Canada should consider knowing about.
By: Larry Steinberg and William Miller, Guest Contributors
In early 2021, a client of the Buchalter law firm received a notice from California’s Employment Development Department (EDD) that the EDD was conducting an audit to determine whether the client’s independent distributors were properly classified as independent contractors, instead of employees.
Though, over the years, the firm has handled scores of such audits on behalf of its clients, this was the first time the firm handled an audit which targeted a client that used a multilevel-marketing model. What also contributed to the unusual nature of this particular notice is that this client is based outside of the State of California.
While the client has no employees in California, and only a handful of non-distributor independent contractors, it does have thousands of independent distributors based in California.
The ostensible purpose of the EDD audit was to determine whether the client was properly paying all of its state payroll taxes, but the company and its counsel immediately understood that if the EDD decided the company’s distributors were misclassified employees, such a finding could have broad-ranging implications—including the possibility of a flurry of tagalong litigation, such as class actions and representative claims under California’s Private Attorney General Act
Regulators stayed busy in 2021, reminding direct sellers of the unique legal challenges faced by the channel throughout the year. Combined with the ever-increasing importance of addressing ESG and fraud risks facing the entire corporate landscape, we have selected the key insights and advice from our knowledgable contributors to keep SSN’s readers ahead of the curve. Please visit SocialSellingNews.com for the complete articles.
By: Colt Passey
Historically, businesses have focused on loss prevention as part of their fraud strategy and want to reduce the impact of fraud on their profit and loss statements. Ideally, they would be able to avoid fraud, but most organizations accept a certain level of fraud-related loss, albeit reluctantly.
Implementing strict fraud prevention practices and multi-factor authentication has become standard practice. However, fraud prevention can also focus on trust and safety by not insulting customers—for instance, by incorrectly identifying legitimate interactions as fraudulent and making interactions intolerable through repeated high-friction challenges. While this statement refers to customers, the same applies to distributors.
By: Donnelly L. McDowell (with content from John E. Villafranco)
With the FTC’s fight on the Hill for new 13(b) authority ongoing, two recent enforcement actions signal that the Commission plans to use its civil penalty authority in novel ways with significant implications for the direct selling industry.
In the wake of the Supreme Court’s unanimous decision in favor of AMG Capital Management—which stated that the FTC lacks authority to obtain monetary redress under Section 13(b) of the FTC Act—then Acting Chair Rebecca Slaughter vowed to lobby Congress in response.
Her goal was to “restore and strengthen the powers of the agency” and consider new ways to obtain money from companies through enforcement. Two months after the AMG decision, the
FTC continues to make good on those promises.
By: Miguel Pena
Corporate sustainability isn’t a quick fix or a one-and-done initiative. It is a valuable practice for companies and a source of strategic insights for risk managers and decision-makers.
Over the past decade, environmental, social and governance (ESG) risks have risen to the top for enterprise risk-management teams.
Mitigating these risks, sometimes known simply as “corporate sustainability,” is playing a greater and greater role in a company’s success.
By: Brian Bennett
Passage of the PRO Act by the full U.S. House of Representatives is the biggest shot across the bow to independent contractor status in recent history.
One of the core issues for the Direct Selling Association (DSA) and direct selling throughout our storied history has been protecting the independent contractor status of the salesforce. When legislation goes to undermine that relationship, it has the potential to throw into disarray our way of doing business. H.R. 842, the Protecting the Right to Organize (PRO) Act, would do just that.