Direct Sellers Update: Regulation, Law & Policy

Direct sellers should take note of recent Federal Trade Commission enforcement actions and a proposed FTC rule which could fundamentally change the legal landscape for non-compete clauses. Under the FTC’s new approach, companies would not be permitted to enforce non-compete clauses against their workers. And yes, that includes independent contractors.

Self-regulatory policing by an independent body is a longstanding tradition in many industries that has now made it to the direct selling world. But, since its inception, we’ve fielded many questions from our direct selling clients about what the Direct Selling Self-Regulatory Council (DSSRC) is and what its impact will be.

On October 2, 2019, the FTC announced a settlement with AdvoCare International, L.P., in which AdvoCare, without admitting or denying the allegations in the order, agreed to abandon its multi-level compensation plan.[1] Under the order, AdvoCare must pay the FTC $150,000,000, which will be deposited into a fund for equitable relief.

We are pleased to announce the launch of our blog covering regulatory, legal, and policy issues affecting direct sellers. Our goal is to bring important legal, regulatory, and policy developments and updates straight to you.