small-logo
ProfessionalsCapabilitiesInsights & NewsCareersLocations
About UsAlumniOpportunity & InclusionPro BonoCorporate Social Responsibility
Stay Connected:
facebookinstagramlinkedintwitteryoutube

Direct Sellers Update: Regulation, Law & Policy

    • Email
    • LinkedIn
    • Facebook
    • Twitter
    Share this page
  • RSSRSS
Topics
Contributors

Sort by:

16 results

August 22, 2024

|

2 min read

Update: FTC’s Noncompete Rule Set Aside

Direct sellers can breathe easy for the time being. On August 20th, Judge Ada Brown for the United States District Court for the Northern District of Texas set
aside the Federal Trade Commission’s (FTC) rule imposing a national ban on noncompete agreements, preventing the rule from taking effect across the
country.
...Read more

May 21, 2024

|

3 min read

Navigating the FTC’s Final Rule Banning Non-Competes: Why Direct Sellers Shouldn’t Panic

The recent FTC approval of a final rule banning non-compete agreements has sparked concern and uncertainty among direct sellers. Understandably, many
are wondering how this ruling will impact their businesses and what steps they can take to protect themselves against unfair competition and misuse of their
intellectual property. However, amidst the apprehension, it’s essential to remember that there are avenues for safeguarding your interests, and ...Read more
...Read more

November 2, 2023

|

9 min read

Neora Part II: Lessons About Deceptive Claims

In part one of our series about the pivotal decision in the Neora case, we provided a high-level overview of the court’s decision and its potential widespread
effect on the direct sales industry.
...Read more

October 5, 2023

|

6 min read

Neora Part I: The Decision and Its Implications

In a long-awaited decision, last week Judge Barbara Lynn in the United States District Court for the Northern District of Texas granted Neora, LLC (formerly,
Nerium) a victory, denying every single claim the FTC brought, including the FTC’s argument that Neora was operating an illegal pyramid scheme and made
deceptive income and product claims.
...Read more

March 10, 2023

|

2 min read

Direct Sellers Should Use the FTC’s Recent Distributor Enforcement Actions to Remind Distributors of the Consequences of Deceptive Claims

The lawsuits, filed by the Department of Justice, on behalf of the Federal Trade Commission, alleged that the distributors, who styled themselves as “wellness
advocates” and touted their expertise as medical practitioners, made numerous claims during webinars conducted in 2022 that doTERRA’s products could
prevent, treat, or cure COVID-19.
...Read more

March 24, 2022

|

3 min read

Are Your Agreements Enforceable?: Ensuring An Adequate Registration Process

Most direct sales companies have arbitration agreements and class action waivers in their distributor and consumer agreements these days.  Those
provisions go a long way in making sure your company is protected from bet-the-business, expensive, and time-consuming class actions and other litigation. 
But a recent decision out of California, Sellers et al. v. JustAnswer, LLC, 289 Cal. App. 5th 444 (2021), underscores the importance of ensuring yo...Read more
...Read more

October 4, 2021

|

1 min read

Protecting Your Business: Five Things You Should Do Now

June 22, 2021

|

2 min read

The Future of the MLM Exemption From the Business Opportunity Rule Is at Risk

The Business Opportunity Rule is up for its scheduled 10-year review, and the results could have a dramatic impact on the direct sales channel....Read more

May 26, 2020

|

6 min read

New Class Action Calls Into Question MLM’s Independent-Contractor Classifications

The direct-selling industry is paying close attention to the Orage lawsuit because if Amway’s IBOs are deemed employees under either standard, many other
MLMs will likely see challenges to their independent-contractor classifications.
...Read more

March 24, 2020

|

6 min read

Recent FTC Paper Likely Overstates MLMs’ Pyramid Potential

A recent paper by members of the Federal Trade Commission’s (FTC) Bureau of Economics describes a new pyramid-scheme hallmark to add to the FTC’s
growing list: A pyramid scheme creates and exploits overly positive recruitment expectations to increase the company’s profits. In other words, by misleading
potential participants about the earning potential from recruitment-related rewards, pyramid schemes induce participants to join even if they ha...Read more
...Read more

February 6, 2020

|

2 min read

FTC Obtains Asset Freeze of Success By Health Top Executives in Arizona Federal Court

On January 17, 2020, a federal judge in Arizona granted the Federal Trade Commission’s (FTC) request to both temporarily shut down the multi-level
marketing company Success By Health, as well as taking the more extreme step to freeze the assets of top executives. Success By Health is best known for
its mushroom-infused instant coffee product “MycoCafe.”
...Read more

December 3, 2019

|

4 min read

The Direct Selling Self-Regulatory Council: What Your Business Should Know

Self-regulatory policing by an independent body is a longstanding tradition in many industries that has now made it to the direct selling world. But, since its
inception, we’ve fielded many questions from our direct selling clients about what the Direct Selling Self-Regulatory Council (DSSRC) is and what its impact will
be.
...Read more

November 20, 2019

|

6 min read

New Executive Orders May Impact FTC Enforcement Actions Against Direct Sellers

Two executive orders issued last month may decrease the FTC’s ability to regulate industries through informal guidance documents. Because the FTC’s
regulation of the direct selling industry relies heavily on guidance, the orders are particularly relevant to our multi-level-marketing (MLM) and direct selling
clients. Although any assessment of the practical impact of these orders is speculative at this point, we believe they may affect the FTC’s regulati...Read more
...Read more

October 10, 2019

|

2 min read

Successfully Fighting Plaintiffs’ RICO Claims Alleging an Illegal Pyramid Scheme

A recent Memorandum Opinion and Order from the Northern District of Texas in Ranieri v. AdvoCare illustrates the challenges plaintiffs may face in alleging a
RICO claim against a direct selling or multi-level marketing (MLM) company. In that Order, the Court dismissed the plaintiffs’ RICO claim against AdvoCare for
failure to state a claim based on the argument in AdvoCare’s motion to dismiss—filed by Winston attorneys on behalf of AdvoCare—that the plai...Read more
...Read more

October 4, 2019

|

10 min read

FTC v. AdvoCare: Enforcement Action Demonstrates Importance of Compliance Programs

On October 2, 2019, the FTC announced a settlement with AdvoCare International, L.P., in which AdvoCare, without admitting or denying the allegations in the
order, agreed to abandon its multi-level compensation plan.[1] Under the order, AdvoCare must pay the FTC $150,000,000, which will be deposited into a
fund for equitable relief.
...Read more

October 3, 2019

|

less than 1 min read

Welcome to the Direct Sellers Update: Regulation, Law & Policy Blog

We are pleased to announce the launch of our blog covering regulatory, legal, and policy issues affecting direct sellers. Our goal is to bring important legal,
regulatory, and policy developments and updates straight to you. 
...Read more

About This Blog

Winston & Strawn’s Direct Sellers Update: Regulation, Law & Policy blog provides developments and insights on the legal issues affecting direct sellers and multi-level marketing organizations.

Contributors

John Sanders

Partner

Katrina Eash

Partner

Rex Mann

Partner

Related Capabilities

  • Litigation/Trials
  • Class Actions & Group Litigation

Get Our Updates

Subscribe
Logo
facebookinstagramlinkedintwitteryoutube

Copyright © 2025. Winston & Strawn LLP

AlumniCorporate Transparency Act Task ForceDEI Compliance Task ForceEqual Rights AmendmentLaw GlossaryThe Oval UpdateWinston MinutePrivacy PolicyCookie PolicyFraud & Scam AlertsNoticesSubscribeAttorney Advertising

We, our service providers, and other third parties use cookies and other analytics, advertising, and tracking technologies on this site. Your information, including personal information and interactions with this site, may be monitored, recorded, or collected through these tools and further used or disclosed by us, our service providers, and authorized third parties. For more details, please visit our privacy policy.