Isagenix v. Modere lawsuit details (raiding)
Earlier this week we reported Isagenix had filed a raiding lawsuit against Modere.
We didn’t have specific details at the time, with only an Isagenix affiliate communication to go on.
Since then a reader kindly informed me that Isagenix have made a copy of the complaint available on their website.
Having gone through it, it seems Modere’s recruitment of Isagenix affiliates is the usual backroom deals story. Full details are provided below.
In their lawsuit Isagenix refers to Modere as a ‘troubled company unable and unwilling to compete using fair and legal means‘.
In addition to Modere, individual defendants named in Isagenix lawsuit include Mark and Linda Klassen, and Brett Davis and Samantha Gascoigne.
Isagenix claims the husband and wife teams are ‘unscrupulous individuals willing to violate their legal obligations for extra money’.
Isagenix believes Modere’s plan to target the company may have been hatched in May 2018.
The so-called “plan” started with a representative contacting Isagenix about possibly acquiring Modere.
Isagenix declined the offer, citing “instability of Modere’s ownership and brand”.
Sometime after Isagenix declined Modere’s offer, Modere and/or its principal owner, a private equity firm, began a smear campaign to spread false statements about Isagenix to its Associates, with the intent that those Associates would leave Isagenix and join Modere.
Alleged recruitment of Isagenix into Modere began in mid 2019.
An unnamed Modere executive is believed to have visited the home of Heidi and Lal MacAllan, who at the time Isagenix claims were two of their “most prominent Australian Associates (affiliates)”.
The executive offered the MacAllans extra compensation outside the compensation normally paid to Modere’s independent salesforce in an effort to incentivize them to join’.
The MacAllans (right) declined the offer, and eventually Isagenix corporate was made aware of the visit.
Heidi Macallan expressed that, if she were to leave Isagenix, it would not be to join Modere’.
Sometime earlier this year, the MacAllans did in fact leave Isagenix to join Modere.
By that time recruitment of Isagenix affiliates was in full swing, starting with Todd and Delialah Lotich in September 2019.
Whether the MacAllan’s backroom deal offer was still in play when they joined Modere is unknown.
Shortly after they signed up though, six other
prominent Australian Associates (three couples) resigned from Isagenix in a coordinated fashion, with resignation emails that were all submitted on the same day and that contained overlapping points.
Isagenix identifies the Australian Associates that left as Brett Davis and Samantha Gascoigne (defendants in the suit), and Matt and Karina Jolly.
They mention three couples left however the third doesn’t appear to be named.
In the US Modere Program Manager Reagen Cox sent Isagenix affiliate Mark Klassan (right) a contract in January.
The contract is reported to have guaranteed Klassen a $180,000 income during his first year with Modere.
The contract supposedly also contained a requirement Cox “comply with his contractual obligations with other companies”.
Isagenix claim that clause was “only for show”, owing to Cox allegedly breaching his Isagenix contract via solicitation.
Recruitment of Isagenix affiliates appears to have and been taking place in private Facebook groups and text message.
These solicitations have contained disparaging remarks about Isagenix, which the company claims are false.
Evidently fully aware of what was taking place, Isagenix
sent a letter to Modere’s Chief Legal Officer notifying the company that all Isagenix Associates are contractually obligated to refrain from soliciting other Associates during their time as Associates and for 12 months thereafter.
And, the very next day, in the evening of Februat1 l, Modere’s CEO Asma Ishaq and its Senior Vice president of Global Sales and Marketing Justin Serra met in person with Klassen and Associates Andrew and Kimberly Lee in an effort to help Klassen solicit the Lees to Modere.
Earlier in January Modere held an event in Anaheim California. Isagenix claims “a number of Associates” were hosted at the event, including Klassen and the Lees.
Modere paid for the Lees’ airfare and hotel to attend the event, and Serra told the Lees that they would be offered an income-guarantee agreement like the one given to Klassen if they were to join Modere
Isagenix states Klassen’s guaranteed Modere income lead him to “brazenly violate” his Isagenix contract.
In addition to his improper solicitation of the Lees, Klassen has solicited a number of other Associates to Modere, including Yolanda David, Wendy Frank and David Oliver.
Much of the recruitment seems to have revolved around guaranteed income backroom deals.
Isagenix states they believe Brett Davis and Samantha Gascoigne were offered “substantially more” than Klassen’s $180,000.
With respect to how Modere was pitched to Isagenix affiliates, they were, among other things, purportedly told Isagenix is fore sale.
Despite clearly wanting to seek retribution over recruitment of their affiliates, Isagenix nonetheless claims that
most Associates targeted by this deceptive attack have stayed with Isagenix.
However, some have left Isagenix and joined Modere, and those departures have harmed many hard-working Associates financially and otherwise.
Part of that harm is to Associates’ morale which, as in any line of work, is critical to productivity’.
This lawsuit seeks reasonable redress for that harm.
Citing eight counts, Isagenix are seeking an injunction against Modere and their affiliates.
The company is also seeking compensatory and punitive damages, as well an an accounting of profits derived via recruitment of their affiliates.
Unfortunately Isagenix’s complaint is a state-level lawsuit, meaning I won’t be able to track it on Pacer.
If we come across any updates we’ll keep you posted below.
In my experience raiding lawsuits like this are typically settled behind closed doors.
I don’t recall one making it to trial, which is probably a good thing seeing as I don’t see short of an outright ban on personal choice, one MLM company can stop its affiliates from signing up with other companies.
On the other hand if a raiding case did make it to trial, perhaps we’d get a precedent on how far a non-solicitation clause can go.
At the end of the day if I mention to someone I’m no longer with company X because I joined company Y, is that solicitation?
If the person I told winds up joining me in company Y, regardless of whether they were in company X or not, did I solicit them?
Maybe these cases are settled because if they ever went to trial, jurors would be bored out of their minds.
Update 17th May 2020 – In May 2020 Isagenix voluntarily dismissed their lawsuit against Modere.