Network Marketing Litigation
The most valuable asset that a network marketing company owns is its “genealogy” (or “downline”) list. This is a list of all the distributors in the network marketing company. If a competitor is allowed to poach top distributors, then that is essentially a death sentence for any network marketing company.
Accordingly, successful network marketing companies go to great lengths to protect the secrecy of their distributors. This is perfectly legal and is indeed required to maintain the lists as a protectable trade secret.
To do this, network marketing companies will routinely send out termination/suspension letters to distributors who are suspected of cross-recruiting distributors for the benefit of a competitor.
To resolve these termination/suspension claims sometimes requires litigation. If this is the case, then both sides need competent counsel to advise them on two things: the evidence and the law.
As far as the evidence is concerned, the most important part of a case is knowing what evidence is important and what evidence is not. Wasting time on irrelevant evidence can be both damaging and expensive. Likewise, failing to acquire critical evidence in time for trial is recipe for losing.
As far as the law is concerned, it is important to work with an attorney who is familiar with the network marketing industry because even the best attorneys can have trouble learning the nuances of a new industry. Network marketing cases often involve disputes over trade secrets, unfair competition, and tortuous interference with prospective economic relations laws. Therefore, it is best to choose an attorney who knows how to litigate these issues.