Blog post violated nonsolicitation clause in Amway agreement

Amway Global v. Woodward, 2010 WL 3927661 (E.D.Mich. September 30, 2010)

Amway Global went after some of its former distributors in arbitration for, among other things, violating the “Rules of Conduct” which serve as an agreement as to how the distributors (formally known as Independent Business Owners or “IBOs”) operate. Amway claimed that the IBOs violated the Rules of Conduct by soliciting others to leave Amway and join competing enterprises.

The arbitrator found in Amway’s favor, and Amway filed a motion with the court to confirm the award. The court granted the motion.

One of the factual questions was whether one of the IBOs violated the rules against solicitation by blogging about his decision to leave Amway and join another company. One of his posts said “[i]f you knew what I knew, you would do what I do.”

The IBOs argued that this statement did not constitute actionable solicitation because the communication was passive and untargeted, and because there was no evidence that anyone responded to the solicitation by leaving Amway.

The court rejected these arguments. As to the “passive and untargeted” argument, the court observed that:

[C]ommon sense dictates that it is the substance of the message conveyed, and not the medium through which it is transmitted, that determines whether a communication qualifies as a solicitation. The [statement] is readily characterized as an invitation for the reader to follow his lead and join [Amway’s competitor], and this is true despite the diffuse and uncertain readership of the site.

As to the argument based on the fact that no one responded, the court found that the express language of the nonsolicitation clause which prohibited “encourag[ing], solicit[ing], or otherwise attempt[ing] to recruit or persuade any other IBO to compete with” Amway did not turn on the success of those prohibited efforts.

2 Comments

  1. RonColeman
    October 17, 2010

    That would really seem to be a stretch applied to a tort claim, but looking at the breadth of that contractual language, as long as the court considered it enforceable, I guess that would count.

  2. Bill Wilson
    October 24, 2010

    I don't think this court's decision is right. If all the former IBO said was "if you knew what I knew, you'd do what I'm doing" then the person has only put into writing what his actions already have told others. When people learn that this former IBO went to another company, they would receive the same message (or should, at least, if they can think) as the blog post. Perhaps the defendant will have better luck with the appellate court.

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