Monat’s Luis and Rayner Urdaneta have filed a countersuit against former President Stuart MacMillan.

The Urdanetas countersuit, in response to MacMillan alleging the Urdanetas run Monat as a “mafia family and unprincipled syndicate”, accuses MacMillan of “gross mismanagement”.

The Urdanetas claim MacMillan cost Monat “millions of dollars in business losses”.

In his lawsuit, MacMillan claims he resigned as Monat’s President in June 2023.

The Urdanetas (right with MacMillan far right), claim MacMillan was terminated, among other things, over concerns about

MacMillan’s repeated display of poor judgment, such as being under the influence at work events and disclosing MONAT’s confidential and proprietary information while inebriated.

After signing on as Monat’s President in 2014, the Urdanetas claim MacMillan

became a highly paid employee, receiving millions of dollars in compensation in a few short years.

MacMillan and the Urdanetas both claim problems between them began in 2019, however each side tells a different story.

MacMillan claims he was threatened with termination “if he did not agree to a noncompete agreement and non-solicit agreement.”

The new agreement allegedly came about because the Urdanetas “felt threatened by Monat’s employees and independent contractor market partners’ loyalty and affection towards MacMillan.”

Here’s the Urdanetas’ version;

In 2019 … MacMillan began expressing his desire to “retire in the near future” and asked the Urdanetas to modify the profit-sharing provisions of his employment agreement to guarantee a minimum amount that he might receive after he retired.

The Urdanetas recognized that MacMillan was nearing retirement age and, based on its family-centric culture, the Urdanetas wanted to accommodate MacMillan’s request and give him a “soft landing” into retirement.

In exchange, however, MONAT wanted assurances that, when MacMillan retired, he would in fact leave the direct sales industry behind and find something else to keep him occupied.

After five years of working with MacMillan, the Urdanetas had learned that MacMillan was mesmerized by the allure of the limelight, celebrity status, recognition, and attention given him by the thousands of beautiful women throughout the world, directly flowing from MacMillan’s access to MONAT’s worldwide stage.

The Urdanetas were sincerely concerned that MacMillan would not be content to truly “retire,” especially after MacMillan let slip that the direct sales industry “was all he knew.”

They did not want to agree to guaranteed, semi-annual payments equaling millions of dollars for MacMillan to “retire” to another direct sales “opportunity.”

As a result, the Urdanetas thought it only reasonable to ask MacMillan to agree to restrictive covenants, including non-competition, non-solicitation, and non-disparagement, in exchange for years of guaranteed, post-termination payments.

Not surprisingly, MacMillan was more than willing to accept this unbelievably generous arrangement because it guaranteed that, for every year he had worked at MONAT (minus one), he would receive a minimum yearly payment of $800,000.

If the profit calculation exceeded $800,000, he would receive more—up to a shocking $2,000,000 annually—for finding a new hobby and hanging out with his grandkids.

The agreement was executed on on October 19th, 2019. After which, the Urdanetas claim they

underestimated MacMillan’s willingness to abandon his friends, toss out his scruples, and put his own self-interest above the people he purported to care about, including MONAT’s thousands of Market Partners.

MacMillan, who claims he’s owed between $8 to $16 million, alleges the Urdanetas are behind Monat’s financial demise over the past few years.

MacMillan’s claims are based on the Urdanetas

  • blocking his attempts to make Monat’s manufacturing more competitive;
  • paying off family and friends through a Monat slush fund;
  • maxing out Monat’s credit cards to fund “luxury lifestyles”;
  • using Monat business funds to “personal and household expenses”;
  • using Monat funds to pay for family and friends to attend Monat distributor incentive trips; and
  • using Monat business funds to pay off personal credit card debt.

The Urdanetas place Monat’s financial demise at the feet of MacMillan.

During the last years of MacMillan’s tenure as President, MONAT experienced three years of plummeting losses and sales declines. MacMillan’s recklessness resulted in inventory control problems on a massive scale, wide-spread attrition, and a botched rollout of MONAT’s EU market.

His ineptitude caused the Company to lose millions in connection with a costly IT project directly under his supervision that imploded.

In 2022 alone, MacMillan was responsible for millions in business losses to MONAT’s bottom line directly attributable to MacMillan’s inattention, lack of organization, poor communication and interpersonal skills, caustic leadership style that led to a toxic work environment, indecisiveness, narcissism, lack of accountability, unwillingness to change what was not working, poor time management, and unimpressive business acumen.

MacMillan, however, refused to acknowledge that he had anything to do with MONAT’s problems. Many times, the Urdanetas had to step in to stop MacMillan from scuttling the ship.

Notwithstanding these facts, the Urdanetas continued to trust that MacMillan was at least trying to act in the best interests of MONAT. Unfortunately, as they would later learn, that was not true.

This brings us to “he said, she said” within Monat corporate.

When the Company was not performing as expected, he passed the blame to the Urdanetas without their knowledge.

For example, MacMillan frequently told Market Partners that the Urdanetas were responsible for out-of-control operational expenses and low profitability.

Sadly, because of MacMillan’s visibility and access to MONAT’s Market Partners, many believed him.

MacMillan’s habit of passing blame for unwelcome news to the Urdanetas expanded to everything about which MacMillan did not want to take responsibility, including employment decisions regarding laying off employees and terminating Market Partners.

At times, MacMillan exploited employees’ and Market Partners’ faith, currying favor by saying that he was the only person at the Company who ever “prayed” for them.

On other occasions, MacMillan attempted to ingratiate himself to certain high-level Market Partners at the expense of the Urdanetas by telling them that he had saved them from being terminated, when in fact, no such action had ever been contemplated by anyone at the Company.

MacMillan used his numerous opportunities to closely associate with Market Partners to disparage the Urdanetas behind their backs.

The Urdanetas did not pick up on MacMillan’s hostility and animosity towards them because to their faces, he feigned friendship and loyalty.

At the same time, however, MacMillan convinced numerous terminated MONAT employees and executives to make public statements critical of the Urdanetas and MONAT under the auspices that the Urdanetas had anything to do with their terminations.

On the contrary, it was MacMillan who was directly responsible for letting these people go. But MacMillan saw to it that each of these people were thoroughly convinced that the Urdanetas were to blame for their firing.

One interesting tidbit is the Urdanetas’ claim that MacMillan set about trying to find investors to purchase the company. This was completely absent in MacMillan’s filed Complaint.

In May 2023, MacMillan began telling Market Partners that “the company is in trouble” and that he was trying to find investors to “save the company.” He told other Market Partners that MONAT “had investors lined up” to buy the Company.

This is notable because MONAT is privately held family business, and MacMillan was never asked to “find investors.”

Nevertheless, MacMillan surreptitiously traveled to Tampa, Florida, and Puerto Rico to meet with potential investors without any the knowledge of the Urdanetas or the approval of the Board.

Notably, the Company was not in financial trouble. In hindsight, it appears that this was little more than further attempts by MacMillan to orchestrate his exit and take as many people with him as possible.

The Urdanetas acknowledging Monat’s “three years of plummeting losses and sales declines”, but also claiming no financial trouble is… odd.

Even odder is the Urdanetas claiming MacMillan was bringing them buyers, which they apparently met with, whilst claiming they never asked MacMillan to find buyers.

During the second quarter of 2023, MacMillan began leaking confidential information to MONAT’s highest ranking Market Partners about a potential sale of MONAT to another direct sales company.

MacMillan’s loose lips are surprising given that he was the one bringing potential buyers to the Urdanetas, even though they never asked him to.

Because the Urdanetas were not planning to sell MONAT, the discussions with these “potential buyers” did not progress far, and no letter of intent was ever signed.

Regardless of how the discussions turned out, why would you meet with potential buyers in the first place if you had no intention of selling. And apparently not just with one buyer but multiple buyers.

Surely any misconceptions would have been addressed when MacMillan bought the first allegedly unsolicited buyer to the Urdanetas?

Next, the Urdanetas address MacMillan’s alleged corporate character.

During these years, MacMillan’s professional judgment also seemed increasingly impaired.

Market Partners began telling the Urdanetas things about MacMillan’s conduct at Company events and elsewhere that raised questions about his ability to effectively manage the Company, lead the Field, and demonstrate MONAT’s core values.

For example, MacMillan misdialed one Market Partner’s cellphone and told her out of the blue that “everything would be okay when MONAT got back into the green.”

When it became evident to MacMillan that he had called the wrong person, he abruptly ended the call. Others communicated to MONAT that MacMillan had directly told them that MONAT was “going under” or that they should “get a second income.”

As a result, numerous Market Partners reported that the Field was confused, and that morale had substantially fallen.

MacMillan progressively earned a reputation for spreading rumors and fueling fights between Market Partners. He regularly stirred the pot with his fellow executives, sowing distrust between them.

He bragged about causing in-fighting, explaining that he thought creating rivals among Market Partners and executives would help spur competition.

More than once, MacMillan became inappropriately inebriated at a Company event or dinner and then proceeded to disclose not only the Company’s confidential information but the private information of third parties, including high level Market Partners.

In the presence of other Market Partners, MacMillan gossiped about and made fun of many of MONAT’s most respected Market Partners behind their backs, including comments about their physical appearance.

Market Partners that had previously held him in high esteem no longer believed him to be the role model he presented on MONAT’s event stages. And many left these events embarrassed for MacMillan.

In short, in addition to leaking MONAT’s confidential information, before and after his termination from MONAT, MacMillan was spreading rumors about MONAT, including but not limited to:

(i) that MONAT was financially unsound;

(ii) that MONAT was being sued by its former chief scientist;

(iii) that the Urdanetas were engaged in inappropriate financial transactions with MONAT;

(iv) that MONAT’s product formulas had been changed, were watered down, or were unsafe;

(v) that Market Partners were planning to leave;

(vi) that the Urdanetas had decided to sell MONAT; and

(vii) that regulators were investigating MONAT. MacMillan also spread rumors to hurt the relationships between Market Partners both crossline and downline.

This, the Urdanetas claim, led to MacMillan’s termination on June 29th, 2023.

By June 2023, it was clear that MacMillan needed to be terminated to protect MONAT and its Market Partners.

On June 28, 2023, Ray met with MacMillan over breakfast to tell him that he was being terminated. On June 29, 2023, Ray sent MacMillan a notice, stating:

As required in section 6 of the Amended and Restated Profit-Sharing, Confidentiality, Non-Compete, Non-Poach and Bonus Opportunity Agreement entered into on October 1, 2019, we have, through mutual agreement, determined that you will be stepping down as President of MONAT Global effective July 31, 2023.

Perhaps to avoid the public humiliation and shame of his termination, MacMillan has since told others than he was not terminated but that he “resigned.”

MacMillan’s public statements, however, are directly contradicted by his private communications with MONAT, in which he has unambiguously acknowledged his termination, requesting such things as monthly advances of his post-termination profit sharing “in lieu of [the] severance” that MONAT pays to terminated employees.

Contrary to any assertion otherwise, MacMillan’s termination has been well documented by MONAT.

MONAT believed (and continues to believe) that it was reasonable to ask MacMillan to stay out of direct sales and to leave MONAT, its employees, and its Market Partners undisturbed and undistracted in exchange for the substantial remuneration it agreed to in the Non-Compete.

Unfortunately, MacMillan has refused to go quietly. Instead, he has continued to inflict damage on MONAT and its Market Partners, in the name of getting more than he is entitled to and out of spite because of his painful termination.

Specific examples of MacMillan “inflicting damage” onto Monat include claims about commission cutting and tampering, as well as product adulteration.

Immediately after being terminated, MacMillan began telling some Market Partners that, not only had he resigned, but he had also done so out of protest to the Urdanetas’ decision to cut commissions, which he said violated his ethics.

This was nonsense, and MacMillan knew it.

MONAT uses InfoTrax, the gold standard of commissions processing platforms, any improper modification of commissions for one Market Partner would affect all Market Partners and create an audit log of the change.

The reason for experiencing a decrease in commissions is simple—decreased sales volume leads to decreased revenue, which leads to decreased commissions. It is simple math.

Unfortunately, MacMillan has led numerous Market Partners off the cliff, spinning a yarn that somehow MONAT is tampering with individual Market Partner’s commissions, even though he knows that is not possible.

He—once again—is exploiting whatever remaining credibility he may have due to his prior position at MONAT and the lack of knowledge regarding how commissions are processed to mislead and harm unsuspecting Market Partners.

Out of false trust or blind loyalty, many Market Partners are not only buying MacMillan’s lies themselves, but they are also passing them on throughout the Field.

MacMillan also began telling Market Partners that he had resigned in protest because of the Urdanetas’ decision to water down MONAT’s products and substitute quality ingredients for cheaper ones. This too is patently false.

The active ingredients of MONAT’s products have not changed since its founding. Certain trace ingredients have occasionally been substituted for better ingredients.

MacMillan knows that his statements are false and cause confusion, yet he still propagates them.

Directly addressing MacMillan’s claims that the Urdanetas are a “mafia family” running Monat as a “cult”, the Urdunatas write;

MacMillan has told Market Partners that the reason the Company is not profitable is “because the family can’t stop spending money.”

To others he has implied that the Urdanetas are buying expensive cars and sailing on yachts with Company money while discussing the layoff of MONAT employees.

MacMillan knew that these types of scandalous statements were untrue, but he made them anyway. He knows that MONAT’s financials are audited by one of the top 10 accounting firms in the world, BDO.

He sat on MONAT’s audit committee for years, attended BDO’s presentations of their audits, and had complete access to MONAT’s financials.

If there were any financial irregularity or impropriety, it would have been reflected in BDO’s audit of MONAT’s financials.

Above and beyond this point, MacMillan’s statements defy logic. The Urdanetas are entitled to distributions from the Company because it belongs to them.

It is surprising that MacMillan would make these false claims when it was MacMillan’s uncontrolled expenses that resulted in most of MONAT’s historical losses.

If there were problems with MONAT’s expenses, they arose from MacMillan’s mismanagement, not the Urdanetas’ spending their own money.

Regarding MacMillan’s Tampa Bay “faith event”, which he claims was unrelated to Monat and that the Urdanetas “sabotaged”, the Urdanetas write;

In September 2023, MacMillan began organizing an event in Tampa Bay. Several Senior Executive Directors (the highest level an independent MONAT distributor can achieve) appeared in social media posts inviting people to attend.

MONAT asked MacMillan about the event and reminded him of his non-compete and non-solicitation obligations.

The Urdanetas pointed out that the event appeared to be sponsored by MONAT due to the participation of many high-level MONAT Market Partners.

MacMillan feigned ignorance, saying that the event was a “faith” event that had nothing to do with MONAT, even though the invitation for the event displayed only high-level MONAT Market Partners.

After MONATions, the Urdanetastold MacMillan that other high-level Market Partners were asking about his Tampa event. \

MacMillan admitted that the event was confusing the Field and promised that he would cancel it.

Afterwards, a few of the Market Partners featured on the invitation told MONAT that MacMillan had used their pictures without their consent and that they were not interested in attending that type of event.

And finally we have the money side of things and the signed non-compete.

MacMillan has told MONAT that “[t]he best way” to get MacMillan to “go away” is for MONAT to pay him.

Shockingly, MONAT has learned that—prior to his termination—MacMillan had expressly indicated that he planned to start or join a competing direct sales business and to “find a home” for MONAT’s employees and Market Partners.

MacMillan has suggested that his actions are justified because he disputes the calculation of the Tail Period commissions MONAT agreed to pay him.

As the Non-Compete makes abundantly clear however, if there were questions regarding the enforceability of the terms of the Non-Compete, he “specifically agree[d] that he [would] fully comply with [the] Agreement unless and until the entry of an award to the contrary.”

That has not happened, but MacMillan is patently breaching his obligations to MONAT.

The Urdanetas claim they didn’t terminate MacMillan for cause

  • because of Ray Urdanetas “long-time and close personal relationship with MacMillan;
  • a “desire to move on without grudges or a lawsuit”; and
  • “to allow MacMillan to save face.

The Urdanetas claim, in hindsight, that MacMillan should have been terminated at cause.

Causes of action the Urdanetas have brought against MacMillan in their counterclaim include:

  • breach of contract
  • breach of fiduciary duty and
  • tortious interference with existing and prospective contract

In addition to their counterclaim, the Monat and the Urdanetas also filed a motion to partially dismiss MacMillan’s Amended Complaint on May 23rd.

An Initial Case Management Conference has been scheduled for July 29th.