$90,000 secret backroom affiliate deals @ Jeunesse (lawsuit)
Although it probably comes as little surprise to most, within any MLM company there are typically two or more levels of affiliates.
This is usually an informal arrangement and generally accepted as the status quo by the affiliate-base at large.
Here at BehindMLM we typically engage the lower-rung of this hierarchy. Those who aren’t privy to the inner-workings of the company they’re in, and who are often oblivious to what goes on at the top.
Occasionally there are exceptions, but we’re more often sharing information “with the masses” than not.
Today is one of those days, and we’re going to take a look at what goes on behind the scenes at Jeunesse.
Before we delve into the business dealings of some of Jeunesse’s top affiliates though, I want to preface by saying what is discussed in this article is in no way limited to or unique to Jeunesse. If you’re in an MLM company there’s a good chance some of what follows is going on in it.
You might not be aware of it or unable to identify it, but I’d be willing to bet that it’s probably there on some level.
Keep that in mind as we enter an arena usually sealed off from public consumption by way of NDAs and other private agreements.
Our main character in this story is Matt Nestler.
Nestler, a “25 year veteran in the multi-level marketing industry”, joined Jeunesse in March 2014.
Whereas you or I might join Jeunesse as a regular affiliate and be expected to build our organization from scratch, the same was not true for Nestler.
Nestler joined Jeunesse by way of a secret Business Development Agreement (BDA).
This agreement saw Jeunesse agree to “provide additional incentives” to Nestler, on the proviso he help “develop Jeunesse’s global business” operations.
Specifically, in the event Nestler failed to earn $15,000 a month, Jeunesse would “top up” his earnings to that amount for up to six months (ending August 2014).
This was agreed on the proviso Nestler would generate tens of thousands of points in sales volume during these months.
If Nestler failed to hit the volume targets in the agreement, Jeunesse still agreed to top up his earning pro-rata.
Jeunesse saw the acquisition of Nestler and Kevin Giguere (Nestler’s immediate downline from a previous MLM opportunity) as an investment.
The BDA required Nestler to generate enough sales volume for the company to make back what it agreed to invest in him and Giguere over his first six months with the company.
Once the initial investment was paid off, Jeunesse agreed to split 50% of Nestler’s commission (above $15,000 in any given month). The BDA stipulates that their split will be put into “a position designated by the company to be used as a travel fund for (Giguere’s) downline”.
Until the $90,000 was made back, Giguere’s position in Jeunesse was to be placed under the company. Once the $90,000 was settled, Giguere’s position was then to be transferred under Nestler’s position.
In exchange for guaranteeing Nestler $15,000 a month, Jeunesse demanded Nestler focus exclusively on the company for a minimum of one year.
Nestler was permitted to earn commissions from opportunities he was previously involved in, but was barred from being ‘visible in or actively working as a distributor in them‘.
Should Nestler fail to adhere to the terms and conditions of his BDA, the agreement saw him owe Jeunesse $90,000. That is $15,000 for six months, the dollar amount invested Jeunesse saw itself investing to acquire Nestler as an affiliate.
The reason you or I never hear about these agreements, is because there’s usually a clause like this buried in them towards the end:
Jeunesse Global LLC and Distributor agree to not disclose the terms of this agreement or the terms of any additional compensation to third parties.
So, with that in place, why are we privy to the explicit nature of Matt Neslter’s arrangement with Jeunesse?
Well, in October 2014 Jeunesse locked Nestler out of his affiliate backoffice. He was then sent an email informing him that he had been terminated from Jeunesse, for ‘failure to adequately support the distributors he sponsored‘.
Nestler has now filed a lawsuit against Jeunesse,
In his complaint Nestler claims that, prior to receiving his termination letter, that he
received no communication from Jeunesse’s corporate office, his upline, or anyone else working for or affiliated with Jeunesse regarding his alleged inadequate support for his downline distributors.
He also received no complaints from his downline regarding this alleged failure to support his downline.
So why, without any prior indication or notice, would Jeneuesse suddenly terminate Nestler’s position.
Well, when your leader acquisition strategy sees you attract leaders with secret deals and agreements offering off-the-table bonuses and financial incentives, out come the cloak and daggers.
As per Nestler’s complaint,
On or about October 24, 2014, Giguere asked nestler to meet him at the nearby Crowne Plaza Hotel in order to provide Nestler with his last two week’s compensation.
When Nestler and Giguere met, Giguere gave Nestler his check, and then requested that Nestler sign a settlement agreement with Jeunesse.
First of all, why is Jeunesse corporate sending out one of Nestler’s downline to speak and act on behalf of them? Shouldn’t someone from company management have handled this?
Surely Jeunesse weren’t banking on a familiar face and one last payment to seal the deal on Nestler’s silence?
Nestler was surprised, as there were zero discussions with the company regarding a potential settlement.
He refused to sign.
And that was that.
… or not.
Giguere subsequently informed Jeunesse that Nestler had signed the settlement agreement, nd provided Jeunesse witha copy of the agreement, which included a forged signature on Nestler’s signature line.
For reference, here’s Nestler’s signature as it appeared on the March 2014 BDA agreement between himself and Jeunesse:
Here’s the signature Giguere presented Jeunesse corporate in October 2014:
One thing I did pick up on is that Nestler does appear to have more than one signature. Here’s how he signed his name on February 20th 2015:
Whether there’s anything further to read into that I’m not sure.
The implication however is that Giguere forged Nestler’s signature in October to “get the deed done”. This forgery was then presented to Jeunesse corporate.
Did Giguere himself forge the signature?
That I can’t say for sure.
But what we can look at is the possible motive Giguere might have had to do so.
Within days of Nestler’s termination, Jeunesse (placed) Giguere above Nestler’s former position.
Based on the normal rules of the Jeunesse compensation plan, Nestler’s former position should have “compressed out”.
By creating a higher position in Nestler’s former organization for Giguere, Jeunesse gave Giguere the benefit of Nestler’s substantial volume in the pay plan, dramatically accelerating Giguere’s income.
Ring-a-ding-ding, cha-ching cha-ching cha-ching.
And that’s not even the half of it…
One month prior to Nestler’s termination, Jeunesse, in breach of its own agreement with Nestler, assigned the sponsorship rights of Giguere’s position to one of Nestler’s competitors, Stefanie Nichols.
Within days of Nestler’s termination, two well-known and highly productive multi-level marketers, Rick Ricketts and Cedrick Harris became active in the organization.
Rickets was placed upline of Harris in Giguere’s downline.
Giguere, Harris and Ricketts were each allowed to accumulate over fifty positions between themselves in the Jeunesse genealogy.
You can bet your bottom dollar that all of these players have their own secret BDA deals with Jeunesse.
How much these agreements meant to Giguere financially I can’t say, but it certainly would appear to provide incentive for him to get rid of Nestler by any means possible.
Even if that meant forging his signature and hoping he went off quietly with his last commission checks.
Cloaks within cloaks, daggers within daggers. With so many possible layers of subterfuge, backstabbing and betrayal in play, it’s difficult to get a clear sense of what exactly went down.
Did Giguere, Harris and Ricketts conspire with Jeunesse corporate to snuff Nestler out? With fifty positions in the compensation plan on the table and financially rewarding genealogy agreements, they certainly had the motive.
The amount of BDAs executed throughout the Jeunesse organization numbers into the hundreds.
The terms of Jeunesse’s BDAs varies person to person. The terms typically include the creation of volume in one of the Binary legs, whereby the recipient would only be required to build one of the legs instead of two.
The terms might also include cash advances along with additional properties for significant cash rewards not available in the general compensation plan.
What we do know for sure is that Nestler is none too happy about how any of this went down.
Upon information and belief, Jeunesse and Giguere conspired to fraudulently terminate Nestler from his position in order for Giguere and others to receive larger commissions and for Jeunesse to avoid paying Nestler commissions resulting from the addition of Ricketts and Harris to Nestler’s downline.
This collusion between Jeunesse and Giguere undercuts the foundational principle upon which direct sales is based, namely, that one can derive profit based on hard work and effort to recruit participants and build one’s organization.
Nestler believes he’s owed ‘$275,000 in commissions from the productivity of Rick Ricketts and Cedrick Harris’. Hence the filing of a lawsuit in Florida on February 20th.
Six counts are cited in Nestler’s lawsuit, including
- breach of contract (Jeunesse)
- breach of The Implied Covenant of Good Faith and Fair Dealing (Jeunesse)
- tortious interference with (Nestler’s) contract (Kevin Giguere)
- interference with Nestler’s business relationships (Jeunesse and Giguere)
- tortious and civil conspiracy to interfere with Nestler’s business relationships (Jeunesse and Giguere) and
- violation of The Florida Deceptive and Unfair Trade Practices Act (Jeunesse)
In addition to claiming he’s owed $275,000 in commissions, Nestler has also asked the court for additional damages to be awarded on all six counts.
How’s this all going to play out? Buggered if I know, but with Nestler’s lawsuit having only been recently filed, Jeunesse have yet to file a reply.
With all the secret deals going on over at Jeunesse, I imagine a secret settlement is not out of the question. Secrecy does after all seem to be par for the course with Jeunesse management.
How much it will take to make the case go away, well that’d be interesting to know.
Meanwhile what of Jeunesse’s affiliates? In this snapshot of the upper echelons of the Jeunesse affiliate-base, what hope does a regular affiliate just starting out to compete?
It certainly sounds like if you’re not getting your own secret backroom deal when you join Jeunesse, then you’re probably under someone who is.
And can you be sure they’re then acting in your best interest, or theirs?
As per Nestler’s BDA, Jeunesse dangle commission top-ups on the proviso of generated sales volume. That’s sales volume you as a downline are tasked with creating.
And you’re not getting anything extra for it. Your upline though…
As to this particular case, I guess we’ll wait and see how Jeunesse respond.
The take-away from all of this though? Like I said at the start of this article, this sort of behavior isn’t limited to Jeunesse.
Keep that in mind the next time you read a headline about so and so leader announcing they’ve just joined a company.
How much do you really know about their arrangement and, more importantly – What aren’t they telling you? What can’t they tell you?
Update 5th January 2016 – A settlement agreement has been reached between Matthew Nestler and Jeunesse in late 2015.
Unfortunately due to its agreed upon confidential nature, the terms of the settlement have not been made public.