There was a recent announcement that Quixtar and a Quixtar IBO leader were going back to court to settle a dispute that arose out of the sale of motivational materials. The original case was first heard during a legal arbitration. This arbitration was held on the belief that Quixtar could bind the IBO leader to arbitration based on the BSMAA(Business Support Materials Arbitration Agreement)
The IBO leader was also the owner of a company producing the business support materials. During the case, his BSM company was found to be separate from his Quixtar Independent Business and not subject to the arbitration.
I hate to say it, but once again Alticor is playing “catch up”. Or as my Momma used to say, “Closing the gate, after the cows done got out.”
Most likely, expecting this case to move forward, long before the recent announcement, Quixtar has added a revision to his Rules of Conduct, making an announcement of its own on August 29, 2006
“At its June 2006 meeting, the Independent Business Owners Association International Board recommended the adoption of Rule 7.3 and the Vender Arbitration Agreement (VAA), and a clarification to Rule 4.14.1 of the Rules of Conduct.
Rule 7.3, the VAA, and the clarification of Rule 4.14.1 were adopted by the Corporation and will take effect immediately.”
The addition of the new Rule and Rule clarification will also be included in the next revision of the Business Reference Guide.” (A PDF version of the guide can be read at this link.)
7.3.5. Every BSM Company must agree in writing to submit to confidential binding arbitration any dispute arising from or relating to the Quixtar business or to BSM:
between the BSM Company and any IBO;
between the BSM Company and any other BSM Company or any of its predecessors, successors, affiliates, parents, officers, directors or employees; or
between the BSM Company and Quixtar Inc. or any of its predecessors, successors, affiliates, parents, officers, directors or employees.
BSM Companies will comply with this requirement by either (a) executing the Vendor Arbitration Agreement (“VAA”) or (b) by executing an agreement of substantially similar scope.
Language in the Vendor Arbitration Agreement begins with a legal recital:
Quixtar provides a multilevel business opportunity to independent business owners (“IBOs’) throughout North America.
BSM Company is not an IBO. BSM Company produces for and/or sells to certain IBOs and their affiliated organizations (“LOAs”) motivational and training materials such as tapes, books, audio-visual materials and meeting and seminar programs(hereinafter”BSMs”) that are designed to aid and support the LOAs and individual IBOs in the development of their Quixtar-related businesses; BSM Company and Quixtar desire to minimize the time and expense that might be involved in resolving any disputes between BSM Company and Quixtar, or disputes between BSM Company and any Quixtar IBO, or disputes between BSM Company and any other company involved in the publication, production, distribution or sale of BSMs intended for use by IBOs, which may arise out of or relate in any way to BSM Company’s sales of BSMs to the LOAs and individual IBOs that purchase same.
The current legal case will move forward, I’m sure; but this new rule seems to be an additional hoop for the current IBO leaders to jump through in the new “campaign” to reign in the “motivational organizations”.
Whether it is too little, too late, remains to be seen.
UPDATE: This entry originally appeared as a guest-blog at Quixtar Blog in September 2006. It was inserted back into On The Road With Dave in November of 2015