LuLaRoe seek to force mommy blogger to disclose whistleblower sources
LuLaRoe are a fashion-based MLM company that have been around since 2012.
Christina Hinks, a former LuLaRoe affiliate, is a “mommy blogger” who goes by the alias MommyGyver.
MommyGyver is also a website, on which Hinks frequently blogs about LuLaRoe.
Much like what we publish here on BehindMLM from time to time, MommyGyver’s articles on LuLaRoe are of the whistleblower variety.
As I write this a Google search for “lularoe” on MommyGyver returns two hundred and thirty-two hits, most of which are accounts from former affiliates and staff (either directly or as source-material).
Hinks (right) claims since she started blogging about LuLaRoe she’s been contacted by “thousands”of past and present affiliates
The latest article on MommyGyver, dated September 23rd, details the story of Phil.
Phil is purportedly a former LuLaRoe customer care employee who claims he was fired for caring too much.
Phil explained to me that he had really loved his job. So much so, that he justified making less than half of his previous hourly rate with Wells Fargo as- “Ok, because I felt fulfilled and better as a person.”
Phil represents the pay was not good at all, but the reward for helping the scores of women that called in for answers was well worth it to him.
Phil reports that he started to notice a change in the caliber of people LuLaRoe was hiring. They went from truly caring individuals to young and cocky people that he often heard bragging about the way they treated people that called in.
He said they hire uncaring people. “If you’re a person that doesn’t care about people, they like you. Before, it was different. Now, it’s just all greed.”
“These kids will just hang up on you. Tell them (callers) that ‘it is what it is’, is there anyone higher than you I can speak to? No. Then just hang up on them.”
Yesterday was just like any other day- until his friend and colleague who he had taken under his wing was terminated for reporting having anxiety from working in the same call center.
He remembers that- “When he was hired, Jordan Brady told me to help him out. He was a ‘blue’, please take care of him, Phil.” He told me. What Phil didn’t know was 30 minutes later, he’d be following his friend out the doors forever.
Martha called him into the office, and that’s when he saw the envelope. After a year and six months of what he felt was LuLaRoe taking precedent in his life- the culture becoming his culture- he was handed an envelope and given the explanation that- “This isn’t the right fit for you.”
Another alleges deals made with LuLaRoe warehouse staff made at the expense of affiliates, who were unable to fill customer orders due to product shortages. Other articles cover the use of copyrighted works on LuLaRoe leggings without permission.
LuLaRoe see the claims made in these articles like these as “confidential and proprietary business information”.
The company doesn’t want this information in the public sphere, and through legal means seeks to put an end to it.
On September 20th LuLaRoe filed a petition in McHenry County Court in Illinois.
Hinks was woken up by a process-server at 6am on September 22nd. After police were called to the scene the server loitered around outside before eventually leaving the petition Hinks’ doorstep.
LuLaRoe’s 100 page petition seeks the names of Hinks sources. According to Holly Baird, a PR representative for LaLaRoe, the company has no intention of suing Hinks.
They “may” however sue any sources Hinks discloses. And therein lies the chilling effect.
Most, if not all of the LuLaRoe content on MommyGyver is sourced from third-parties.
LuLaRoe could sue Hinks but it’d be a lost cause (unless they simply wanted to harass).
Instead LuLaRoe are going after Hinks’ sources, which will have the same end-result: no more articles about LuLaRoe appearing on MommyGyver.
Even if they don’t sue anyone, the filing of a petition and “we know who you are” that may result from it will likely have the same desired effect.
Whistleblowers are rarely in a financial position to defend their claims in court, hence the secretive disclosure to begin with.
Interestingly, Hinks has been in contact with LuLaRoe’s lawyers for some time now.
In an open letter to LuLaRoe published on May 11th, Hinks discloses she’d received an email from LuLaRoe’s attorney “that evening”. The email was followed up by a phonecall.
The open letter serves as Hinks’ response, in which she writes;
First and foremost, I am not your issue. I am not your enemy- never was, never will be.
I know it may seem like that because I don’t have a lot of nice things to say about you a lot of the time. I want you to know there are reasons for that.
Let me start by discussing how I come about the information in my blogs and my statements about this company.
1. I get hundreds of messages a day. It happens. A lot of it is redundant- the same screen shots, links, messages, over and over.
2. I never collected anything on my own. I never needed to. As a journalist, I am protected from liability because the information is GIVEN to me.
How a source comes by that information, I do not know- nor is it my duty to ask that of them.
3. My sources are confidential. I have offered to provide redacted information to your attorneys to prove outside source, but protect those informing.
4. I am not participating in any sort of slander or defamation or libel. I report on information I am provided. I source and fact check.
There is a lot that I do not report on because- it’s just a lot. I don’t care about Katie’s house or car. I don’t care about what shoes you wear, DeAnne.
What I care about are the consultants.
5. The videos I get are given to me. I have not recorded or published any video of my own other than a video of myself speaking on the topic.
6. Internal documents are provided to me- outside of my own contract that is not protected by any non-disclosure.
From the tone of Hinks’ letter, it very much sounds like the lawyer email was of the “cease and desist” variety. That was back in May so presumably Hinks has been on LuLaRoe’s radar for some time.
Illinois Shield Law applies to reporters
regularly engaged in the business of collecting, writing or editing news for publication through a news medium on a full‑time or part‑time basis
Blogs should be covered as an “electronic medium”, however I don’t think this has been tested in an Illinois court.
A reporter can be forced to reveal their source(s), but only if
“all other available sources of information have been exhausted” and that “disclosure of the information sought is essential to the protection of the public interest involved.”
That clearly isn’t the case here, given what Hinks reports on is often found elsewhere on the internet in the public domain.
As to public interest, LuLaRoe’s own petition acknowledges it was filed
to protect and safeguard … its tens of thousands of Fashion Retailers who rely on LLR’s goodwill and reputation to sell LLR products to retail customers.
LuLaRoe affiliates have a vested financial interest in the company’s reputation. The public? Not so much.
If anything, it’d be in the public interest for what Hinks has published to be in the public domain.
As I understand it a major ongoing point of contention fueling much of the backlash against LuLaRoe was a change to their affiliate buy-back policy.
A buy-back policy in MLM is when a company agrees to buy back unsold inventory from affiliates at a set price.
In layman’s terms it’s a policy to mitigate affiliate losses if they stock up on product they can’t sell.
After accepting refund claims through this buy-back policy months ago, thousands of LuLaRoe affiliates have yet to be paid.
In response to the latest petition, Hinks claims it was filed because LuLaRoe ‘doesn’t like whistleblowers exposing corruption in the company.‘
For now, whistleblowers who shared their LuLaRoe stories and experiences with Hinks can rest easy.
Framing LuLaRoe as “corporate bullies”, Hinks doesn’t explicitly go into her planned defense but does state;
I intend to see them in court and stand my ground.
You all chose to speak to me. You felt safe with me. I shared your stories, and I have not broken your trust. I’m not starting now.
I promise you I will not go anywhere until a court tells me I have to- or until this company changes its ways.
At the end of the day, all any of us wanted was for them to just do right by the working folks that made them billionaires.
The petition isn’t showing up on Pacer so I currently don’t have a way of tracking the case.
With the media attention the petition has garnered however and Hinks’ platform on Mommygyver, I’m sure any significant developments will be made public.
Stay tuned…
Hinks’ website is one of those free Wix.com things and the graphics look pretty basic to me.
LuLaRoe’s attempts to shut down criticism from this lady strike me as overkill. Indeed they are more likely to attract more adverse comment from people who were previously unaware of their business model. I mean look what happened to McDonald’s when they sued a couple of virtually penniless hippies for libel. That case spawned the McLibel trial and turned out to be one the greatest PR disasters which made McDonald’s a laughing stock.
A quick Google on “The Streisand Effect “ will show just how stupid they’re being.
LuLaRoe has a couple PR disasters on their hands.
Twice in 2017, they’ve been accused of pilfering designs off the Internet for their leggings without permission. One of them even still had the artist’s watermark on it. As there is no public catalog of LuLaRoe products (there may be an internal database somewhere) there’s no way to know if other violations exist.
Hinks was one of the people who talked to Business Insider and probably Quartz earlier this year (Feb? March?) regarding LLR’s business practices.
Apparently, LLR treats their business like a collectible card game… “Consultants” can order, but they never know what they’ll actually get except qty and size. They can easily over thousands of dollars in products, but 90+% are unsellable in their local area. The rare ones quickly go on eBay for huge markups, while most consultants languish with excess inventory.
With enough complaints, LLR started a what they termed “temporary waiver” started in April 2017, that allowed consultants to return unsold stuff for 100% refund an LLR will even pay for shipping. Normal return policy is LLR will buyback for 90% and consultants pay shipping back to LLR. However, it seems this “waiver” had just been rescinded, with no public announcement.
And there are reports that refund requests have been backlogged for MONTHS. And we are talking about potentially THOUSANDS of dollars of inventory from EACH request, which are in the THOUSANDS as well (one source claimed 4000+ requests pending).
In the meanwhile, it’s clear that the returned leggings are going back out to other consultants, who reported getting stuff still with other consultants label on them, as well as damaged merchandise.
There are also reports that abusive uplines are urging their downlines to “stop paying bills”, “pawn your car”, “open more credit cards” to stock up on even MORE inventory that won’t move.
The LLR reps that talked to Quartz wished to remain anonymous for fear of retaliation. Hinks was one of the few reps that were mentioned by name from the BI article. If Hinks had been let go after March 2017, it could be construed as retaliation.
What a train wreck. LuLaRoe (LLR) affiliates are taking their frustrations with the company out on each other. The official LLR facebook page is a classic example of when “word or mouth advertising” goes badly wrong.
The nature of the product line, clothes with many styles and patterns, all sorta off beat and “not for everybody” sounds great in principle but the way LLR works is by expecting their affiliates to stock $5K+ in inventory to make it more likely they’ll have something for everyone.
Massive inventory requirements, slow, unresponsive product return systems that change policies at a whim risk turning a problem into a catastrophe. Lack of communication is doing everything you could expect it to as well.
The biggest change in return policies isn’t the drop to 90% refunds or LLR no longer paying for shipping, it’s what items they will grant refunds for.
If you took an item out of it’s packaging and if one of the tags fell off (like when it was hanging on display and someone tried it on) then you most likely will not be granted a refund.
If you didn’t buy the item directly from the company but rather swapped inventory with another affiliate, no refund will be granted.
Interestingly enough, if you return products you paid for to the company and they refuse your refund they don’t send you those products back (because you might dump them below retail on eBay) but “donate” them to someone or another. Presumably without giving you the benefit of a charitable deduction for tax purposes.
But there isn’t anything wrong with LuLaRoe that couldn’t be fixed with a total change in ownership, management, product lines and business model.
Uh, affiliates order leggings but have no idea what patterns they’re getting?
Lolwut?
Yep, false scarcity as a marketing tactic. LLR states that they make a fixed number of any given pattern but tell affiliates not to worry because “they all sell.”
Google LuLaRoe Unicorn Hunters and then listen to some affiliate accounts of fugly patterns that never seem to sell very well.
Example number 2,537,485 why MLM business thinking is different than real world business thinking: “Pattern X is in very high demand, our retailers could sell a very significant number of them if we can get them into their hands while this trend holds. Therefore we will”:
A – Make a lot of them, they’re outselling all our other product lines or:
B – We don’t wish to diminish how unique this pattern is by selling too many of them and besides our retailers only real choices are to sell what ever the hell we send them or they can just quit.
Option B seems to be skyrocketing in popularity at this moment. Its somehow strange that the popularity of this decision in no way seems to make it any less unique.