KidReadingWallcropOn July 19 2008, we were honored to be guests of Richard Dennis on the Saturday evening Mentoring For Free Skills Calls. To listen to that call, click here:

Policies and Procedures with Bob and Anna Bassett.

Early in 2007, Michael Dlouhy encouraged us to look more carefully at MLM companies based on his training “Five Pillars – What To Look For In A Company”. We have now analyzed close to two hundred companies, and our findings have shocked and amazed us.

When we finished what we thought was going to be a couple of pages of info for the call, it had turned out to be enough for four articles! Our first was called “Written By Lawyers” which addressed the first two categories of red flags, and our second was “Do I Really Have To Do That?”

Here is our third installment, where we discuss the last category:  Over the Top and What the Hell Clauses …

We have found that the Red Flag Clauses in the PNP’s fall into five major areas:

RedFlag1. Length and Readability
2. Termination

3. Ongoing and Increasing Responsibility

4. Unusual, Vague or Bizarre Responsibilities

5. Over the Top and What The Hell? *

We have the expression here in Canada, and it may be universal – BOHICA!  “Bend over.  Here it comes again.”

That’s how you’re going to feel after reading these real clauses from the Policies and Procedures of real companies who do not have your best interests at heart.

The scary clauses we have found are too numerous for one article, so stay tuned for one more.  They will give you good practice in reading the too many pages of tedious legalese that can harm you later on.  Learn to avoid companies with clauses like these in their PNP’s!  Better yet, read your own PNP’s to see if any of these appear.  If they do, run far and run fast to find yourself a good five pillar company.  Here we go …

Distributors must have ongoing contact with their organization, including the accompaniment of downline distributors to Company meetings, training sessions, and other functions.

Dog ButtsWhat?  Imagine a downline of more than a few people spread around the world.  Do you have to go pick them up for the meetings?

Upline distributors are responsible to motivate and train new distributors in Company product knowledge and effective sales techniques.

Does this mean that if your new rep makes no sales and finds you boring, you can be terminated?

The Company reserves the right to use its judgment in deciding whether certain activities are improper, unethical or illegal. The Company, in its sole discretion, will decide the appropriate corrective action if it determines that unprofessional, unethical or illegal activities exist and reserves the right to suspend or terminate any Independent Sales Associate’s status, including but not limited to all commissions and bonuses.

This is the same company that used its judgment in deciding to include this clause in the PNP’s.  The company does not trust you and you should return the favor.

Associates must keep and maintain accurate records and are encouraged to print and keep copies of service agreements and avoid any misleading, deceptive or unethical practices.

Is this not the job of the company?  What happens to you if you have a fire or lose your paperwork? We know of a rep who was terminated after losing his paperwork in a flood.  The water was too high and so was his check.

Dog on MotorcycleYou must adhere to, and enforce the compliance of all members of their Personal Groups with the Company policies as outlined in this P&R, the Member Application, the Distributor Application for Corporations, Partnerships, and Limited Liability Companies, Company publications, and administrative letters to the Field, including any amendments to any of these documents that may be adopted from time to time.

What?  How do I enforce compliance with anything?  I can hardly get them to return a phone call!  Have I agreed to become a Compliance Officer?  That’s a lot of policies and applications and administrative letters to keep up with and enforce!

The Company may reject a Director appointment if the applicant exhibits poor leadership attributes or has engaged in conduct that may adversely affect the reputation of the Company or its members or has operated in a manner that is not lawful, ethical, or moral.

Where is the list of poor leadership attributes and who decides? Where is the list of conducts and who decides?  Who determines the reputation of the company?  Who defines ‘moral’?

I further agree to stay educated on and abide by all Federal, State and local legal statutes governing the sale or solicitation of the products and services marketed by the Company.

Wow.  Am I attending Law School?  Will there be a test on all this?

The distributor agrees to participate in up to twenty Company meetings and events annually, at the direction of the Company.

This company wants to tell you where to go and how often.  We’d be telling THEM where to go and it would be just once!

I will be honest and fair in all my dealings.  I will perform all my business in a manner that will enhance my reputation and the positive reputation established by the company.

This is about as vague as it gets.  Who decides what is fair?  Who defines ‘positive reputation’?  What recourse do you have if the company is not ‘honest and fair’ in all its dealings?

Distributors must monitor the Distributors in their Downline Organizations to ensure that downline Distributors do not make improper product or business claims, or engage in any illegal or inappropriate conduct.

This one is a doozy.  It means that if someone seventeen levels down from you shows up at a meeting naked and pierced and tattooed on a motorcycle high on crack cocaine, you are toast.

While the company welcomes constructive input, negative comments and remarks made in the field by Distributors about the company, its products, or compensation plan serve no purpose other than to sour the enthusiasm of other distributors. For this reason, and to set the proper example for their downline, Distributors must not disparage, demean, or make negative remarks about the company, other Distributors, our products, the Marketing and Compensation plan, or the company’s directors, officers, or employees.

That means that if you are treated poorly by someone in rep services and you happen to mention it to anyone, you may be terminated.  Isn’t there something in the Constitution or Charter of Rights about freedom of speech?  Oh, maybe not, never mind … God forbid that we would ‘sour the enthusiasm’ of any rep in a company that would include a clause like this.

To read more, click on What The Hell Clauses.

To learn more about how to protect yourself, start with Success In Ten Steps by Michael Dlouhy. It will save you years of failure and frustration, and perhaps an unpleasant termination!

Bob and Anna Bassett
Skype bobbassett