DENVER: Quixtar and a group of 15 distributors have taken to trading barbs online as they await the latter groups' lawsuit, alleging that Quixtar knowingly operates as a pyramid scheme, to go to trial.
The plaintiffs are seeking a nullification of their contracts. A focus of the lawsuit is the non-competition agreement included in the contracts. Hearings are set to begin on September 12.
“The action filed in California on August 9 alleges not only that Quixtar is a pyramid scheme, but that the owners have acknowledged as much over the last few years, but concealed it from the independent business owners [IBOs] and the public,” said DJ Poyfair, the attorney from Shughart, Thomson, & Kilroy who is representing the plaintiffs. “A lot of these IBOs are people who need the monthly income and would like to move to another company. It’s this economic peril that Quixtar intended to impose on IBOs who dared to quit.”
“Non-competitions are common in many industries, but I’m not familiar with one that is designed to trap independent business owners in a pyramid scheme,” Poyfair added.
Ashton Partners has been hired to represent a group of 15 distributors in a lawsuit against Quixtar, the American Amway operations. Ashton Partners, which has a practice dedicated to litigation support, has been brought on board to provide strategic communications counsel, drive media relations and outreach, and manage the plaintiff’s Web site, www.freetheibo.com.
“Ashton Partners, like other media consultants with whom we deal, are essential to the overall management of the litigation, much more now than in years past because of the power of the [Internet],” said Poyfair.
Quixtar has struck back with entries on their own blog, http://media.alticorblogs.com, taking an aggressive tone in touting a recent ruling in their favor by a Michigan court.
“We’re engaged in a situation with class-action lawyers and campaign spokespeople,” said Kate Makled, manager of corporate communications at Alticor, Quixtar’s parent company. “What the blog is intended to do is not hide behind corporate talk. [It is] designed to give appropriate big picture context to people outside our business.”
Rob Zeiger, director of corporate communications for Alticor, wrote in an e-mail that there are also “numerous efforts underway” to speak with other IBOs “who are building their business the right way,” but did not elaborate.
When asked to comment on accusations that they operate as a pyramid scheme, Makled said they would "fight that allegation in court."
Aside from the blog, there are other parts of the Web site that speak to the IBO situation, and Quixtar has responded to the largely local Michigan press that has inquired on the subject.