A May 22nd filed class-action lawsuit alleges Beachbody has

exploited its California salesforce by misclassifying them as independent contractors rather than as employees.

Through her one hundred and thirty-seven page filed suit, Plaintiff Jessica Lyons seeks to hold Beachbody accountable under California law.

Named defendants in Lyon’s class-action are:

  • Beachbody (rebranded as Bodi in March 2023)
  • Carl Daikeler (co-founder and CEO)
  • Jon Congdon (co-founder)
  • Kathy Vrabeck (COO)
  • Michael Neimand (Division President)
  • Marc Suidan (CFO) and
  • Helene Klein (CPO)

The aim of Lyon’s class-action is to get Beachbody Coaches (distributors) reclassified as employees.

Today, Beachbody preys upon many of the most vulnerable members of our society.

In exchange for their work promoting the brand on social media, referring new customers, providing customer service, and driving traffic to Beachbody’s website, Beachbody pays them at most a paltry commission.

As it stands under Beachbody’s current compensation model, Lyons argues that Beachbody exploits its Coaches for “million” in “free marketing”.

“Coaches” are purportedly promised the opportunity to build a business; in reality, however, they supply free marketing and sales support that would otherwise cost Beachbody millions.

Lyons (right) argues that while Californian law has a “direct sales exemption”, it was

written 40 years ago, and among other things, is expressly limited only to those salespersons making “in person” sales, such as door-to-door salespeople and home “Tupperware party” hosts.

It does not reach Beachbody’s modern, online business model.

Lyons cites the “significant control” BeachBody exerts on its Coaches as evidence its business model falls outside of the exemption.

Beachbody also exerts significant control over Coaches in their limited, but important role as social media marketers.

To protect its intellectual property, brand image, and legal interests, Beachbody requires Coaches to comply with a byzantine series of rules and regulations.

BehindMLM covered one such example in 2017, wherein Beachbody banned its Coaches from working “any other network marketing business”.

Nowhere in those rules, however, does Beachbody require or even suggest that sales be made “in person.”

Rather, Beachbody places restrictions on when and how Coaches may order products and limits the locations in which the products may be sold, effectively preventing any meaningful sales that are “in person.”

The result is that virtually all sales occur on Beachbody’s website, where Beachbody provides the ad copy, sets the prices, and fulfills the order.

Commissions earned by BeachBody Coaches also comes under fire.

The lack of discretion given to its Coaches is evidenced by the fact that few can or do actually earn money under its compensation system.

For instance, in 2021, 25% of Coaches did not receive a single commission check.

Lyons claims that of those who did receive a commission in 2021, “many more” still wound up losing money to Beachbody’s mandatory $15,95 Coach fee.

Citing a California Supreme Court precedent (Dynamex v. Superior Court), in which it was established that Dynamex’s “salesforce were in fact employees”, Lyons argues so too are Coaches because of the way Beachbody “deploys and relies on them”.

Coaches, who make up the bulk of Beachbody’s workforce, are denied even the most basic protections of federal and state labor laws.

Beachbody does not pay them minimum wage; it does not pay overtime; and it does not reimburse business expenses, such as internet connections, laptops, smart phones, or post-promotion over Facebook, YouTube, and Instagram.

Its classification of its Coaches also deprives them of basic protections against discrimination and sexual harassment.

In communications with shareholders, Beachbody executives have heralded the work of the Coach network, while touting the low-cost compensation scheme.

Plaintiff Jessica Lyons joined Beachbody in 2016. She remained a Coach until May 18th, 2023.\

Speaking to her own personal experience, Lyons cites herself as a “victim of BeachBody’s practices”.

Like all Coaches, Plaintiff was trained by other Coaches and Beachbody materials, and was required to market, distribute, and sell Products to the public in accordance with Beachbody’s instructions and parameters.

And in return, Plaintiff was paid virtually nothing, while incurring unreimbursed personal costs to perform the work on Beachbody’s behalf.

For these reasons, Plaintiff brings this action to recover unpaid wages, overtime compensation, penalties, interest, injunctive relief, damages, and reasonable attorneys’ fees and costs under the California Labor Code, IWC Wage Order 4 and California Unfair Competition Law.

As a Class Representative, Lyons hopes to represent

All current and former Beachbody Coaches who resided in the State of California or who performed marketing or sales activities in California during the applicable statutes of limitations through the date a class is certified.

Specific questions of law the class-action will address include (quoted verbatim);

  1. Whether Beachbody misclassified its Coaches as independent contractors when in fact they were Beachbody employees;
  2. Whether Beachbody failed to pay Plaintiff and Class Members the legally mandated minimum wage for all hours worked;
  3. Whether Beachbody failed to timely pay wages due to Plaintiff and Class Members during their employment;
  4. Whether any misclassification by Beachbody was voluntary and knowing;
  5. Whether Beachbody Coaches’ duties fall within the Direct Sales Exemption to AB5;
  6. Whether Beachbody controlled the manner and means of the Coaches’ work;
  7. Whether Beachbody failed to reimburse Coaches’ business expenses;
  8. Whether Beachbody failed to maintain accurate time records for its Coaches;
  9. Whether Beachbody failed to provide complete and accurate wage statements to its Coaches;
  10. Whether Beachbody failed to pay Coaches their wages due at termination;
  11. Whether Beachbody should be enjoined from continuing the practices described herein.

Arguing that Californian law is outdated with respect to MLM is an interesting take. If Lyons’ succeeds in her class-action, Californian law itself might change with respect to classification of MLM distributors.

Personally I agree that what was seen as MLM forty years ago, for the most part, doesn’t apply today. How MLM products are sold and how MLM distributors interact with retail customers and potential recruits has changed dramatically.

That said the aims remain the same. It’ll be interesting to see what decisions the court makes as the case progresses.

While I wouldn’t call it a trend yet, over the past few years a number of class-actions have been filed seeking to establish MLM distributors as employees (Premier Financial Alliance and Neora).

Unfortunately Lyons’ lawsuit has been filed in the LA County Superior Court of California. While I can track the case docket accessing individual filings is problematic.

This means BehindMLM won’t be able to track Lyons’ class-action as closely as other legal cases we report on. Still, we’ll do our best to keep you updated on any developments.

Plaintiff Lyons is being represented by the law firms Tycko & Zavareei LLP and the Clarkson Law Firm P.C.

The firms have set up an MLM Misclassification website, on which a copy of Lyons’ class-action complaint can be accessed.


Footnote: While it’s noted Beachbody rebranded as Bodi in March 2023, I’ve referenced the name Beachbody as that’s what the company is still best known by. It’s also the company name referenced in Lyons’ class-action.


Update 3rd October 2023 – A First Amended Class Action Complaint was filed on September 25th.

A hearing on Bodi’s Motion to Compel Arbitration remains scheduled for April 3rd, 2024.


Update 27th January 2024 – There are two Jessica Lyons in California who have promoted Beach Body.

This article originally contained two social media screenshots of the wrong Lyons. This was fixed as per Lyons reaching out in the comments below on January 27th.