July 21, 2008
Is this what it has come to?
By Truth in Miscellaneous
When I first started blogging about Amway and Quixtar there were a number of blogs and sites about this opportunity and each seemed to have it's own niche. Quixtar Blog seemed to be one that broke stories, had a variety of different weekly posts. Monday Reader Mail, Farcial Help Desk, etc, etc. xanadu had his infamous blog that broke down the tapes and the BS that was on them, Quixtar Demons went to town on WWDB group, and of course On the Road with Dave was and still is a unique blog with an active IBO who was not on either side per se, just really sensible about the whole thing.
Today while approving comments I received two comments that caught my attention. First one was from "whoz" (Scott Larsen) and the second from "joecool". Larsen's comment was about all the sites that Insider (David Steadson) apparently owns, and joecool made a comment that the article on Larsen's site was in his opinion "The Smoking Gun" that Steadson is on the Amway corporation payroll for what he does on the net.
Well no doubt I found the words "The Smoking Gun" interesting and so I headed over to Larsen's site to get the 411 (sorry, my teen told me I needed to try and talk more cool). I was thinking what could he possibly have, bank statements? wire transfers? corporate memo? communications between Steadson and Amway? Much to my dismay I found a bunch of information I already knew for quite sometime. Insider aka IBOFightback aka David Steadson owns many blogs and has a ton of videos on YouTube. The article pretty much tried to paint a picture that it is next to impossible that someone would have this much time to do what is being done without getting paid.
Well before I go any further first of all I have no idea if Insider is paid for what he does. Seems to me he is not, but I could be wrong. Second not one part of that article was anything near resembling a "smoking gun" in my opinion. A list of sites and some speculation does not a smoking gun make.
I decided to go ahead and look into all those sites that Insider is claimed to run since they were all nice and listed there for me to copy and paste in my browser. The first thing I noticed is that many of those sites are blogspot which means they are free to own and operate. From the other sites I can't imagine a burden of cost that is all that great. So now the only thing to look into was the amount of time that was being spent.
Obviously the biggest chunk was the blogspot blogs that were created and so I checked into those first. Out of all of the free blogs I found a total of 81 posts, most blogs have been up for a year with only two being 3-4 years. Even so if you divide 81 posts by 52 weeks in a year that means Insider posted 1.5 times a week. Not very hard to do. Larsen also referred to Insider as a "frequent" editor of the Wikipedia Amway listing. A quick check over there showed roughly 29 edits in a year, which translates to about .5 edits a week. Yet again, not hard to do, and hardly what I would call "frequent".
The other sites owned by Insider seem to be what takes up the bulk of his time spent on this issue. First you have this Truth about Amway site, this is a site that I check out from time to time and I can say for sure that new articles are not going up everyday on the blog, and many of the other articles are cookie cut from news headlines about Amway.
The Amway Watch site is (or was supposed to be) about Amway news only with no other kind of commentary. At least that is what I was told in a private message when I inquired about it. Again most of the articles seem to be cut from headlines with news about Amway or Quixtar. But just for Insider don't think I didn't notice the links at the bottom to many "commentary" articles as well. Something I was told was not going to be part of the site.
Finally Amway Talk and Amway Wiki are the other sites. Amway Talk is a forum and I think that is self-explanatory. Amway Wiki could use up a great deal of time, but I also know there are others who are posting and editing at that site as well. Certainly not a one man effort.
Now don't get me wrong I am no fan of Insider. I have discussions with him on his site from time to time and just recently got on him for trying to paint the conclusion that Larsen makes big coin from his site ads. I also refer to him sarcastically on this site from time to time as well. In my opinion he is the master of the Amway spin, and can usually spin his way out of anything. In the end if you are honest with yourself you have to have to give him a little respect cause he won't back down and he isn't your average everyday drive-by commenter like so many other IBOs who comment on this site.
In the end I have to ask the question "Is this what is has come to?" As far as I am concerned I believe there are still issues with this business and abuses going on in Lines of Sponsorship. Matter of fact from some of the comments and e-mails I get I know it is still going on. But from both sides (Insider included) it seems anything will do when trying to paint a conclusion about others on the web. From comparing critics to jihadists, and posting such vile things that even a Quixtar corporate blogger calls you a cyber-bully, to others wanting "some sort of medal" for their delusional self-promotion of victory over another site, comparing Amway to Nazis, and agreeing with any sort of article, even though ten minutes of research would show it has no foundation, just because you dislike the person it was written about. Frankly, it's all starting to get just a bit ridiculous.
June 27, 2008
Orrin Woodward wants Amway to confront reality
By Truth in Amway
Today I read an article over at Orrin Woodward's blog titled "Amway/Quixtar North America - Confronting Brutal Reality". In a nutshell Orrin goes through some numbers and other data to come to the conclusion that Amway/Quixtar has actually declined in sales since 1980. This of course is summed up to the leadership at Amway and the conclusion that they are not facing the reality of their broken business model.
At the end of the article Orrin gives Amway some "free advice" and has some comments that I found to be stinging:
"Judging by the sales of Amway North America, I believe that the Amway managers are receiving poor grades on their leadership competence. If Dick Devos believes he has the ability to run the state of Michigan as Governor, then I would recommend that he prove it on his beloved Amway business first. It would make Dick’s message more palatable to the Michigan voters. The Amway managers are welcome in advance for this free advice."
For me personally the icing on the cake for this article was the schooling job he did on one commenter by the name IBOFightback aka "Insider", or as Orrin called him "David Fightback". Insider didn't stick around too long.
UPDATE: Thanks to Imran I noticed that Orrin has blocked links from this site. Interesting to say the least, I have asked him what the deal was.
UPDATE: Orrin has responded below in a comment regarding his blog blocking links from this site. In a nutshell he doesn't know why, and is going to have it taken care of. Thanks Orrin.
May 28, 2008
Hey Amway IBO...you haven't done anything yet!
By Truth in Amway
What is it about some IBOs that makes them think simply by being in Amway they are already more successful then any broke loser who is getting by working at their J-O-B? They know who they are, we have all seen them, read their comments, there is no denying it. They are usually the ones who get offended when asked how much profit they claimed on their taxes, as if it was matter of the utmost national security, and can't possibly understand where some slimy critic who couldn't hack it in their super successful business gets off asking such a question.
Well here is where we get off asking such a question. Chances are good those slimy critics are doing better financially in their J-O-B then you are, or for that matter ever will do in your business. Chances are good those slimy critics who are doing the right things with their money are going to be walking some beaches of the world, while the closest many IBOs will get to a beach is cleaning out the cat litter box on the weekends.
Now this might be sounding a bit harsh, and trust me I do not have any intentions of degrading or belittling anyone. It's like my old Drill Sergeant told us on the day we were to graduate from basic training.
"It's about humility soldiers, you gotta know you ain't no (stinkin) battle-hardened war hero, you are the lowest of the low and you gotta earn it here son."
Notice the parentheses as the word really used was much more colorful then the one I put in there, I will let you use your imagination. But the point being is that he was right, we all thought we were big and bad cause we got to fire some weapons, learned some hand-to-hand combat, completed some of the most physically challenging things we had ever faced, and now we thought we were a bunch of green fightin machines. When in reality we were nothing more then a bunch of kids who had a total of two months in the Army and didn't have the first clue as to real soldiering.
So to you IBOs, and you know who you are. Don't get offended next time you are asked for your financial information about your business. People just want to see if you are the battle-hardened war hero that you are acting like you are when you are flipping off at the mouth about J-O-Bs and telling others that they are going to be broke losers the rest of their life because they don't think Amway is the best thing that they have ever heard of. In a nutshell it's their way of saying "You gotta earn it here son!"
May 24, 2008
Memorial Day Tribute
By Truth in Miscellaneous
For me Memorial Day means primarily one thing and that is honoring those who lost their lives in service to their country. Of course there are others who hold other meanings for this day and it is not my intent to belittle those meanings, but rather express who I think about on Memorial Day. This year, much like the past few years Memorial Day holds a more present meaning for many families around the country. Soldiers, Marines, Airmen, Sailors, and Coast Guard who have lost their lives not only to keep America free, but fighting for the freedom of others.
While this weekend also means travel plans for many, and getting together with family and friends please take time out to remember the hundreds of family and friends who are affected each time a warrior dies in service to his/her nation. Those who are in harms way have put everything on the line so keep them in your prayers, but raise you glasses, pay tribute, and remember those who sacrificed everything.
Please no political rants in your comments, whatever your views keep it about those who gave all.
May 23, 2008
The Amway IBO Chicken Flock
By Truth in Amway
I got my Believe DVD just the other day and thought the movie was great. It was funny, sadly true in so many ways and I thought it did a great job at taking a funny poke at some issues within the MLM industry including Amway. Interestingly enough the part I liked the most had nothing to do with the movie but rather one of the Special Features on the DVD. It was the interview with the "Industry Insider", not to be confused with our at times local Amway supporter who goes by the handle Insider or IBOFightBack.
Contrary to our local Amway supporter this Insider who was interviewed about this DVD was refreshingly honest about his industry. He was quite open in admitting that much of what is portrayed in the movie happens in the MLM industry, and unlike many IBOs who comment on this site (including Insider) he doesn’t try to make excuses by speculating on the numbers of actual abuses. Matter of fact he quite openly admits there are too many cases of abuse by uplines in the MLM industry.
My favorite part of the interview was when he was asked about what kind of reactions the movie would get. His answer was that they would get all kinds of reactions from all different kinds of individuals. When talking about those who would react with anger and offense he repeated a one-liner that his Grandma had told him many years ago: "If you throw a rock into a flock of chickens you know the one you hit because it comes out squawking." Basically stating that if you are angry about this movie it is most likely hitting a nerve about something you are doing in your business.
Not only do I feel like that is true with this movie, but it is also true with this blog. This blog in a metaphorical sense throws rocks into the Amway IBO Chicken flock at times, yet the reactions always seem to be different. Yes, we certainly get our share of IBOs that come out squawking, they like to tell us what a loser we are and how we just didn't have the backbone to make it to Diamond. They tell us to enjoy being broke, etc, etc, and on and on and on. On the other hand we also have those who come here and say "Wait a minute….I have never seen that, this is the way things are done in my organization." and usually go on to have a constructive conversation. Sadly the latter seems to comment here way less then the other type.
As far as I am concerned the squawkers just signal that what was written is true, one of my favorite lines has always been "The truth will set you free, but first it will piss you off." For any of you who have the movie and have not watched the interview I would highly recommend it. Also, just to point out an interesting note about this movie, they didn't just take some playful pokes at IBOs, they also took some at "critics" which I found quite funny. The guy living in an underground basement doing a radio show (which I like to compare to the podcasts Qblog and I used to do) plotting his protests and just coming across as over the top obsessed with the destruction of the company Believe was some of the funniest scenes in the movie. However I don't see any "critics" squawking at this portrayal, I wonder why that is?
May 18, 2008
Funny yet sadly so truthful
By Truth in Humor
It has been sometime now since Believe the Movie was first talked about. Qblog even did an interview with the film's director Loki Mulholland a while back. Well tonight I decided what the heck and purchased my own copy of the movie. I was impressed with the site and how it has evolved since the last time I visited. I would recommend reading the stories that were submitted, they are some of the funniest stories I have heard. Here is an example:
"I was sponsored by a friend of mine. One of the direct distributors above me was always well-dressed, wore rings, had a nice car, etc. After two years or so of showing the plan, attending meetings and buying material I'd sponsored two people and wasted incredible time and money. Years later I was at a friend's apt downtown. We ordered a pizza and who would deliver it but the same well-dressed direct distributor! I hid behind the couch and covered my head with a pillow. I was embarrassed for both of us."
They also have put up a blog that seems to be just getting started. I figure if the movie is even half as good as some of the clips that are out on youtube it will have been money well spent. Anyway, here are a couple of my favorite clips off of youtube that are funny yet so very true.
April 12, 2008
Perfect Water now not as Perfect.
By Truth in Amway
Since I first found out about this new perfect water product that Amway is going to be distributing the thing that of course caught my attention was the claims that were being made about this product. The whole deal about having improved flexibility, balance, and strength in just seconds with one ounce I found to be quite outrageous. No surprise to me however was the comments from those who came here defending such ridiculous claims.
In this situation however this story actually has a different twist from the outrageous product claims that have been made about Amway products of the past. A quick trip over to amquix.info shows several articles that Scott Larsen has written about perfect water and in many of those articles he has screen shots of the perfect water website as it has evolved. The twist on this product is that the manufacturer was making the claims as well and even had the infamous "tip-test" instructions posted on their website.
At the start it appears from the screen shots that the perfect water manufacturer was indeed making claims about improving balance, strength, flexibility. Also, they had the tip-test instructions posted for anyone to read and try out to prove how perfect their water was indeed. Today however the perfect water site makes absolutely no claims about their water except to say it's a great bottle of water. Nothing about a tip-test, or an improvement in any capacity.
I actually feel sorry for the IBOs on this one since the manufacturer of the product appeared to be encouraging these claims at one time, even though I believe some common sense questioning of the tip-test would show it to be bunk. Now that the perfect water site has removed all claims about the balance, flexibility and strength improvements it is my opinion they never really believed that their water could improve any of that. Now that the claims have been removed from the website however I am interested to see how many IBOs continue to defend the tip-test and the claims that were previously made about this product.
April 5, 2008
Go Memphis
By Truth in Miscellaneous
I don't really follow College Basketball or any basketball for that matter. Right now I am actually going through football withdrawals, and using baseball to get me through as rough as that is. But I know Qblog loves his Memphis basketball team and they are in the Final Four so I thought I would make mention of it and let's see if they can win it all.
March 27, 2008
Amway and their Perfect Water
By Truth in Amway
Around the web I have been seeing more and more articles about the Perfect Water product from Amway. Of course it is open to some skepticism because of the claims that are being made, which are that you can have better balance, strength and flexibility after even just one ounce and this can occur within seconds. Apparently there are demonstrations of this being done by IBOs and many of those videos can be found on the web.
A search for Amway and Perfect Water on YouTube will show several videos from open meetings of these "demonstrations". I have watched several videos and I have a hard time believing some of the claims that they are making can happen with just one ounce of water, and occur in an instant on top of that. So I have included a couple of videos in this post, one of them is a demonstration and the other is a video uploaded by Scott Larsen showing how he believes the IBOs are rigging the tests. I will let you make up your own mind about the water.
UPDATE:
Over at the opportunity zone there is a post about making false claims about products, and references perfect water directly. The article is written by Gary VanderVen and he states in the article:
IBOs must only use claims and demonstrations which have been approved by Quixtar to promote this product. This list of approved claims is available at www.drinkperfectwater.com or in the "What's New" section at www.quixtar.com.
So with that I paid a visit to the drinkperfectwater.com site to see what kind of claims they make about the water, since they would be the approved claims for IBOs to use, here is what I found in the FAQ section:
What are the benefits of drinking Perfect Empowered Drinking Water? The water has been developed as a premium drinking water and is intended only for that use. No specific benefit claims are made nor represented. To see what others are saying, see the Testimonials tab on drinkperfectwater.com and share with us your own testimonials as to the ways you feel Perfect Empowered Drinking Water benefits you! (emphasis mine)
So since the site FAQ says they make no specific benefit claims or do the represent any are the demonstrations by IBOs in the videos seen on YouTube a violation? An argument could be made either way and I won't comment on that question myself but again I will leave it up to you to make up your own mind.
March 13, 2008
Carnegie on Wealth
By Truth in A/QMOs
Do you know who Andrew Carnegie is? As far as Forbes is concerned he is the second richest man in the history of the world second only to John D. Rockefeller. Just to give you an idea of what being that high on that list means Bill Gates ranks 20th on the list and Warren Buffet ranks 41st. That ranking is based on their highest ever net worth. So needless to say Andrew had quite a bit of spare change in his pocket.
His view on wealth though is what I have always admired. Carnegie was known for being a big philanthropist, and it was said that he wouldn't give a begger a dime, but he would build him a library. He felt that his purpose of being rich was to use the money to make society better as a whole. By the time he died he had given away most of his wealth and was worth only $30 million which was quite a bit less then at his peak he was worth $298 billion.
Of all the times I went to a function, rally, meeting, etc. I rarely if ever heard about this kind of thought process when it came to wealth. I can however remember just about every single speaker talking about the home they owned the cars that they bought "just for fun", the shopping spree that was just for passing the time, etc. But yet since they have some folks in their downline making some money, many making money off of tools sales just like them they are lauded as great men and women who are making a better world for others.
No one seems to see the wake of destruction that is left behind also. The divorces over the business, the ruined family relationships, the financial despair, etc, etc, etc. Most of it sadly because the downline listened to some unbelievably stupid upline "advice". My favorite was always "you can't get fire from your fireplace until you put some wood in there" of course that translates as "you can't go Diamond unless you buy some CDs, books, and function tickets".
Sadly to often many people in this business are simply obsessed with the material items that wealth can bring. Don't even try to deny it because it is all over the place in this business. Go to one function and they have multiple films of Diamonds on lavish vacations, shopping for jewelry, driving their fast cars, etc. From stage there are a million stories about their material items. There is nothing wrong with having nice things, but there is something very wrong with making those things the focus of your life.
So since many current IBOs like to come here and tell me that I am not qualified to have an opinion since I did not go Diamond or make as much money as the leaders of the business I will leave with a quote from the second richest man in history, who out earned all IBOs combined many times over:
Man does not live by bread alone. I have known millionaires starving for lack of the nutriment which alone can sustain all that is human in man, and I know workmen, and many so-called poor men, who revel in luxuries beyond the power of those millionaires to reach. It is the mind that makes the body rich. There is no class so pitiably wretched as that which possesses money and nothing else. Money can only be the useful drudge of things immeasurably higher than itself. Exalted beyond this, as it sometimes is, it remains Caliban still and still plays the beast. My aspirations take a higher flight. Mine be it to have contributed to the enlightenment and the joys of the mind, to the things of the spirit, to all that tends to bring into the lives of the toilers of Pittsburgh sweetness and light. I hold this the noblest possible use of wealth. (emphasis mine)
February 28, 2008
Typical Prospecting Story
By Truth in A/QMOs
I found an interesting post on a forum where an individual talks about getting prospected at a car show by an IBO. Sadly the way he describes the story happens more often then it should and is the primary reason IBOs have a bad stereotype attached to them.
Recently I was at the Philly Auto Show admiring the new Challenger and a guy started talking to me about how what I do and where i'm from yada yada yada. Anyway he tells me he has a business and he is looking to do business down my way with Circut City and Best Buys and also is promoting a new energy drink. So I left him my number and he gave me a business card and said next time he was in my area we should meet about me helping him with his business in my area. About a week later he gets up with me and wants to meet, he's about 2.5 hours away and I set a meeting up with him and he told me a little bit about his company and how it advertises and markets new products. So when he finally comes down to meet he talking to me about it and then shows me these "motivational" DVD about making 50k in your spare time. Turns out he is an IBO and works for Quixtar. So the information seems all good and nice and he said I can make about 50k by putting in about 8-10 hours a week. So he wants me to meet him 2.5 hours away where he is from for this meeting to learn even more about the business and leaves me with some info and some samples. Well I have never heard of Quixtar and after reading the info he gave me, the fine print, and online research it seems very schemish. Its a borderline pyramid scheme. and its looks like 1 out of every 2,800 people even make 30k with it. The average income for these people are $118 a month. I found some pretty good information on it www.amquix.info and called the guy back and told him I am out of it. Well he gets all offensive and makes it to seem that everyone who says anything bad about Quixtar is bone headed. Well he accused me of being dishonest because I "made" him drive 2.5 hours one way only to not be interested, but I told him that until you actually met me you never said a word about Quixtar and made it seem like it was your business. He didn't have anything to say. Anyway long story short I am glad I got out of this before I put too much money in.
Let's take a look at some of the deception and straight BS in this.
1. Anyway he tells me he has a business and he is looking to do business down my way with Circut City and Best Buys
Flat out lie, the IBO is not looking to do any business with the Circuit City's or Best Buy's. The business has already been done by Quixtar and it is called a Partner Store agreement. Is Best Buy even a Partner Store? Now I know some supporter could come here and spin that statement 9 ways to Sunday, but the bottom line is this IBO was not telling this prospect the way things were.
2. So the information seems all good and nice and he said I can make about 50k by putting in about 8-10 hours a week.
Can anyone show me just one person who makes 50K and all they put in no more then 8-10 hours since they started? If you can show me someone who claims that, I will show you a liar.
3. Well he accused me of being dishonest because I "made" him drive 2.5 hours one way only to not be interested, but I told him that until you actually met me you never said a word about Quixtar and made it seem like it was your business.
Of course in the end the IBO blames the prospect for "making" him drive to see him only to not be interested. I guess it never crosses the IBOs mind that if he had been upfront and honest from the start about this being Quixtar, and the money he was talking about was going to take much more then 8-10 hours he would have saved himself the trouble of trying to sell this opportunity to someone who wouldn't be interested.
Many IBOs make claims that it is because of the "critics" that their business has a bad name. However it is this kind of practice that has indeed been the cause of the bad name. Being deceptive and not being upfront about what is going on only leads to people getting upset. No one likes to feel deceived or lied to. In the end it is not how you feel you can spin what your business is all about, it is how others are going to perceive you. Every other business takes great care in maintaining the best image possible. Perhaps IBOs should learn this aspect of business as well.
February 22, 2008
Fred Harteis Resigns from Quixtar.
By Truth in A/QMOs
Over on Fred Harteis's blog Fred has posted his explanation of his resignation from Quixtar. I found this to be the most interesting part of his post:
"As an IBO I have entered into many discussions concerning issues I have had with Quixtar i.e.: product pricing, the IBO compensation plan, negative on the web."
Negative on the web? Now I know Fred didn't specify exactly, but most of the negative on the web is due to abusive practices by motivational organization leaders. I wonder how many other leaders complained about the negative on the web with Quixtar. Were they looking to Quixtar to do something about it? Isn't that kind of like expecting someone to clean up a mess that you made yourself? The way I see it if the IBO leaders showed more concern for their downline making a profit rather then buying tools and getting tickets to the next great conference there would not have been a mess to clean up in the first place. At any rate I wish Fred well in whatever his next venture is going to be.
February 18, 2008
Wal-Mart and Amway / Quixtar
By Truth in Amway
When I was in Quixtar I remember many times references to Wal-Mart being used. During an open meeting the speaker would tell the prospects that instead of spending their money at Wal-Mart they could buy from their own company and make money. IBOs tell people that Wal-Mart never gave them a check for shopping there like they get from their own business. Wal-Mart this and Wal-Mart that. Pretty much every time a reference to a traditional business was used it was Wal-Mart.
So when I saw an article by Ray Alexander in the Opportunity Zone titled "Not Wal-Mart and never want to be" I couldn't help but laugh a little. The question isn't that IBOs need to compete with the Wal-Marts, Sam's Clubs, etc. It's a matter of IBOs need to stop comparing themselves to them. You see an IBO can argue that the quality of their products are so much better then Wal-Mart till they are blue in the face. But each time you compare the Quixtar business to shopping at Wal-Mart you kill the argument.
I see Quixtar IBOs prospecting people in Wal-Mart all the time. So is it any wonder that they feel they have to compete against Wal-Mart? Not that there is anything wrong with shopping at Wal-Mart, but do you think people who are doing a good deal of shopping at Wal-Mart are more concerned about price or quality? The obvious answer to that question begs this question for IBOs, if your products are of such great quality what in the world are you doing going after a market that is interested in price? Something tells me when IBOs stop comparing themselves to Wal-Mart Ray won't have to tell everyone that Quixtar / Amway doesn't want to be Wal-Mart.
February 11, 2008
More on the Amway Arbitration case
By Truth in Amway
As expected the reversal of the arbitration ruling in the Morrison case has made it's rounds and now the IBOAI, Alticor, and even others are putting their two cents in. Of course most of what is being said I don't think is even addressing the issues. To me it looks like more damage control then anything. At any rate there are apparently some things that the IBOAI want you to know.
1. The decision in this case could be changed in future court proceedings. (Much like how the earlier decision in favor of Amway was later changed in future court proceedings).
2. The Morrison decision was based upon arbitration agreement rules that were in effect in 1998 and have since changed. For instance Amway can no longer make changes to the agreement without the consent of the IBOAI.
3. The dispute arose before January 1, 1998 when the arbitration agreement went into effect and therefore that does not apply to anyone who had a dispute after 1998.
As far as Alticor goes they are trying to say that all Morrison gets is a redo of his arbitration, and that the decision was based off of the fact that the dispute arose prior to 1998. But from the way I read it the court is saying there was no enforceable arbitration agreement because of Amway's unilateral authority to amend.
Other certain Amway supporters have also written on their site that after having time to read the decision "properly" they also see the decision being based off of the fact that there was no arbitration in effect at the time of the dispute. Well apparently time was of no help to read the decision properly.
The way I read it however the final wording in the decision clearly is referring to Amway's unilateral right to amend the agreement. Here is what the final wording is in the decision:
There is nothing in any of the relevant documents which precludes amendment to the arbitration program – made under Amway’s unilateral authority to amend its Rules of Conduct – from eliminating the entire arbitration program or its applicability to certain claims or disputes so that once notice of such an amendment was published mandatory arbitration would no longer be available even as to disputes which had arisen and of which Amway had notice prior to the publication. There are no Halliburton type savings clauses which preclude application of such amendments to disputes which arose (or of which Amway had notice) before the amendment. We accordingly hold that the arbitration agreement was illusory and unenforceable under Davidson as applied to the claims asserted in the instant suit.12 We thus reverse the district court’s October 15, 1998 order staying the case pending arbitration and its September 15, 2005 final judgment denying the Distributors’ motion to vacate the award, granting Amway’s motion to confirm the award, and entering judgment based upon the award; and we remand the case for further proceedings not inconsistent herewith. (emphasis mine)
The reference to Halliburton is addressed earlier in the document where Halliburton's arbitration was ruled not illusory since they could not avoid arbitration by amending or terminating the arbitration provision due to the way it was written. Amway had no such "saving clause".
But as with anything I encourage you to go and read the decision yourself and come to your own conclusion. This case is quite old and many of the rules considering arbitration have changed. But for anyone considering this business I would recommend that you get a good understanding of such processes.
February 9, 2008
Court rules against Amway Arbitration
By Truth in Amway
The Fifth Circuit US Court of Appeals has ruled against Amway/Quixtar in the Morrison case regarding the arbitration decision. From what I gather Morrison lost against Amway in arbitration (no surprise there) then objected to the arbitration when Amway went back to federal district court to get a judgement on the arbitration decision. The district court decided in Amway's favor, and Morrison appealed the ruling. The case ended up with the US Court of Appeals Fifth Circuit and the district courts ruling was reversed and the arbitration ruling was vacated.
The reversal of the decision seems to be mostly based off of the fact that the arbitration was invalid and unenforceable because Amway continued to reserve the right to modify or revoke the arbitration agreement at-will. So basically since Amway was not bound to the arbitration provision they could not enforce it on anyone else.
I have never been a fan of Amway's arbitration process since it always seemed like going to a card game with a stacked deck against you. From the way I understand it Amway trains the arbitrators, Amway could revoke or modify the arbitration provision at-will, and Amway hand-picks the arbitrators. Now I am no lawyer, but it seems to me if all of that is the way the Amway arbitration process works "fair" would not be the first word that would come to mind. So I must say I am happy with the decision and hope that it can possibly lead to a better process that is fair to all the parties involved.
You can read much more about the history of this case and view the actual documents at amquix.info website.