Amended Complaint – Robin Blackmon Dunda

An amended complaint was filed August 31, 2007 in the Robin Blackmon-Dunda v Mary Kay Inc. case in Dallas County.

Some interesting facts about Robin’s unit and career with Mary Kay:

5. Until her termination by Defendant, Plaintiff Robin Blackmon-Dunda was a Sales Director ith Mary Kay of long, and illustrious, standing having begun her Mary Kay business in July, 1987 and debuting as a Sales Director in 1994, achieving Top Ten in sales for her (Sapphire) Seminar three times, Million-Dollar Sales Director twice, and Top Ten Sales Director Nationwide twice. She was Queen of Unit Sales for the Sapphire Seminar in 2005, and 1st runner-up in 2006, finishing 5th for the entire nation. Her Mother, Jo Ann Blackmon has been with Mary Kay for 37 star-studded years of her own. They are the first mother-daughter Million-Dollar Sales Directors in Mary Kay history.

6. Plaintiff Robin Blackmon-Dunda had 683 Independent Beauty Consultants and the 5th ranked unit sales out of 14,000 units nationwide in Mary Kay, which includes 715,000 consultants. Her sales topped the $1.1 million amount the past two years and were over $900,000 in 2004.

The complaint alleges that Mary Kay took away her unit without compensating her for the future revenue those people would bring in for Mary Kay, and that they denied her and Stryker the opportunity to go on the top director trip, which she had already earned.

Specifically, the amended complaint alleges:

10. By its conduct, Defendant has failed to give Plaintiff Robin Blackmon-Dunda an opportunity to sell her right to a residual income stream from the sales of the Unit she has spent years building and training has worked a forfeiture of the $220,000.00 or more annual income generated from her business, including Commissions, Prizes and Awards, not only for her life expectancy but for the reasonable “life expectancy” of the Unit she has created and maintained.

11. Mary Kay, in misappropriating Plaintiff Robin Blackmon-Dunda’s business will, with reasonable probability, generate tens of millions of dollars of sales and profits from the sales made by her Unit now and into the future.

The amended complaint also discusses promotional materials issued by Mary Kay Inc., which purport that consultants and directors are their own bosses with their own independent businesses. However, the complaint alleges that they are not really independent if the business and the future income stream can be taken away by Mary Kay Inc. whenever the company desires.

Mary Kay also represents to the public, the income tax collecting arm of the State of Texas, the FTC, and the Internal Revenue Service, as well as to the Courts of this State, on the one hand that its consultants and sales directors are not employees, but on the other hand failing to recognize its independent business owners are entitled to all of the rights of business ownership, including the right to reasonable compensation for their residual income streams upon termination of their businesses, or to give them such time as would be reasonably required to make a transfer of their business for fair value.

Details of disciplinary actions and allegations made by Mary Kay against Robin included:

On April 8, 2005 Plaintiff Robin Blackmon-Dunda was asked to meet with five executives of Mary Kay at its headquarters in Dallas and advised to attend the meeting alone, without even being allowed to bring her husband, Stryker Dunda to the meeting. At the meeting she was threatened with termination by the five representatives of the Defendant and shown a letter of termination (which was not actually given to her) dated for her termination effective April 8, 2005, and told she was being put on indefinite probation and not allowed to teach at Seminar 2005 held in July, 2005, or speak there as the top Director in the company. based upon Exhibits 7 and 8, in combination with a letter sent to her by in-house counsel in 2001 alleging a violation of paragraph 8.7 of her contract with the company to the effect that she had placed an order in another person’s name without her consent, another letter from in-house counsel dated November 25, 1995 where she had been accused of endorsing the business of a family friend, and an email from her to her Directors discussing the prospects of getting their cooperation in creating their own training DVD, which was never actually created, true and correct copies of which are attached as Exhibits 9 and 10.

Most importantly, further information about the alleged breach of the sales director contract is included:

In yet another letter from in-house counsel dated August 14, 2006, a true and correct copy of which is attached hereto as Exhibit 13, received several days after the date of the 30 day termination letter, Exhibit 3, Plaintiff Robin Blackmon-Dunda, was again chastised by the same company lawyer who had sent Exhibit 3 a few days before, alleging violation by said Plaintiff of Sections 8.6 and 8.10 of her Independent Sales Director Agreement by virtue of being “involved with the sale, promotion, and/or distribution of a hostess apron as well as an instructional DVD [she] created,” and that she had “promoted the lending services” offered by a third party, even though she had not mentioned her affiliation with Mary Kay.

 

Defendant sought to stop the sale the hostess aprons even though its executives had expressed approval of the hostess apron on several occasions but had no desire to give credit to Plaintiff or allow Plaintiff to take any credit for the idea. Plaintiff Robin Blackmon-Dunda’s husband, Stryker Dunda is not bound by the provisions of the Independent Sales Director Agreement signed by his wife, and he was the person who had marketed the hostess apron, selling thousands of them through his website, www.success4me.net . In its multiple letters to Plaintiff Robin Blackmon-Dunda accusing her of, among other accusations, endorsing a family friend and other businesses, and selling training tools and other associated products or services to other Mary Kay consultants, Defendant has wrongfully and unfairly selected Plaintiff Robin Blackmon-Dunda, one of its most devoted, loyal and successful Directors ever, for unwanted, harassing and discriminatory treatment, while ignoring a multiplicity of similar activities by some National Sales Directors and other Sales Directors of Mary Kay.

The suit also alleges deceptive trade practices by Mary Kay:

40. In addition to being an independent contractor, entrepreneur and the owner of her ownbusiness as a result of her contracts with Mary Kay, Plaintiff Robin Blackmon-Dunda was, for 17 years, a consumer of the Defendant’s products as that term is defined under § 17.45 of the Texas Business and Commerce Code, having purchased thousands of dollars of goods from Mary Kay since 1987. Throughout her relationship with Mary Kay, until the very end, she was deceived by the company’s continuous, non-stop, orchestrated campaign through speeches at the annual Seminars, business opportunities meetings, CDs, DVDs, cassette/VCR tapes, brochures, letters and emails, to sell her and to sell the other Consultants in her Sales Unit, Mary Kay products which were designed to be consumable and purchased by all of them on a monthly basis, upon the representation that by purchasing, Mary Kay products they were building their “business” with sales volume and new Consultants. who were also told to purchase Mary Kay products in order to build their businesses. In 2000 Plaintiff was in the office of Tom Whatley, then president of Mary Kay. Sales Directors Jill Savage Floyd and Heather Placencio were also present. Their  purpose in meeting with Mr. Whatley was to express their concerns about the lack of skin care classes being booked and held by beauty consultants. He told them at the meeting that the company was well aware of what was happening in the field. He went on to inform them that the  company had statistics as to the approximate number of classes being held by the average consultant on a monthly basis. He stated to them at that meeting that the company’s research indicated that the average consultant held one-half of a skin care class a month. This confirmed what the three Mary Kay Sales Directors in attendance at the meeting already knew about the lack of iformational meetings. At that point Plaintiff asked Mr. Whatley to put the power of the company behind the Sales Directors of the company and help them book appointments. Plaintiff stated to those in attendance, including Mary Kay’s President, “Instead of just trying to sell stuff to us, why don’t you help us sell?!” His reply to me was “that is not our job, that is your job!”

41. Mary Kay, among other deceptive practices, has repeatedly represented to Plaintiff Robin Blackmon-Dunda and its other Beauty Consultants and Sales Directors that status as Independent Beauty Consultant and Sales Director affords them the complete ownership of their “own business” which is a deliberate falsehood inasmuch as the Defendant’s executives are all well aware of the fact that Mary Kay strictly forbids its Consultants and Sales Directors to sell, transfer or will their “businesses,” and enjoys the fruits of the labors of its Consultants and Sales Directors by forfeiture of their right to receive the “income stream” or value of it when they die, leave or are terminated by Mary Kay. These trade practices of Mary Kay were misleading, deceptive, and false in that Mary Kay terminated Plaintiff without compensating her for her “business,” and would not allow her to sell or will her “business.”

And the allegation that Mary Kay knew Robin would be “trashed” on anti-Mary Kay sites and therefore subjected her to emotional distress:

47. The conduct of the Defendant alleged herein was either calculated to cause severe emotional distress to Plaintiff Robin Blackmon-Dunda, or Defendant acted recklessly in doing so. Defendant’s executives were well aware of the extensive blogging activities of and concerning Mary Kay on the website, “Mary Kay Sucks,” now known as “Pink Truth”, and on other websites, knew that the termination of Plaintiff Robin Blackmon-Dunda would become known to that blogging community, consisting primarily of openly disgruntled women who either are or were associated with Mary Kay, as soon as the ink was dr y on the termination letter signature and knew or had reason to know that the termination of said Plaintiff would be “spun” on that blog in such a way that both the Plaintiff and her husband, Stryker Dunda, would be repeatedly and mercilessly trashed and disgraced, to the ultimate dismay of Plaintiff Robin Blackmon-Dunda.

48. The conduct of the Defendant in conducting the groundless, harassing, and extremely humiliating witch hunts, inquisitions, and cruel punishments against Plaintiff Robin Blackmon-Dunda, ending with the cavalier, torturous public termination and forfeiture of the business she had spent nearly two decades building, complained of herein, all of which Defendant knew would subject said Plaintiff to public embarrassment, emotional pain, and permanent damage to her reputation as a first rate Mary Kay Consultant and Sales Director, constitutes extreme and outrageous conduct by the Defendant Mary Kay.

She is also alleging defamation by executives of Mary Kay:

52. Mary Kay, through its principal executive officers have consistently communicated to the field of Beauty Consultants and Sales Directors contemporaneously with and subsequent to previous terminations of Sales Directors for Mary Kay that those terminations were undertaken as a result of what Mary Kay concluded were unethical behavior or financial irregularities which would be viewed by law enforcement authorities as criminal behavior. A meeting was held at the 7 Salsa Restaurant — Coppell, TX, August 22, 2006 attended by Darrell Overcash, Heather Hines, Jana Cox, and Plaintiffs parents Ron and Jo Ann Blackmon. At this meeting Darrell Overcash told Plaintiff’s parents and the others at the meeting there was more to the termination of Plaintiff  than her parents knew. He told them at that meeting that there were other things that they did not  know about and that “they would be shocked to find out what the real truth was pertaining to Robin.” Darrel Overcash stated at that meeting, “There are other things that you are not aware of. Everything that you say is what you believe that is all that happened. I know as parents especially — even when it plays out there’s still a chance that you are not going to believe it.” At the meeting Jo Ann Blackmon stated, “Don’t I as her National Sales Director get a copy of everything in her file?” Darrell Overcash replied, The agreement is between the company and her so there are other discussions that we have of her that we do not share with the National Sales Directors, Senior Directors or Directors.” Those in attendance at the meeting were therefore left with the impression from Mr. Overcash’s statements at that meeting that there was something so horrible that Plaintiff had done to warrant such drastic action as her termination after 17 years as a Mary Kay Beauty Consultant and Sales Director. yet he refused to discuss the details of what it was he was referring to in his meeting with them, but inferring that the details revealed something horrible about Plaintiffs conduct. When they pressed him for what Plaintiff did that was so terribly wrong to warrant such harsh action he indicated that there might be a chance that they could possibly sit down and discuss the situation and the facts with him and Nathan Moore, the company’s Vice President, at a later time; however he called Plaintiff’s parents shortly thereafter and said that that was not possible.

 

In August, 2006 shortly after my termination NSD LaQuita McCollum called Jill Wedding and asked why I was terminated. She was told “Robin knows what she did.” When in fact I was given no reason for the forfeiture of my business. Jill’s intention was to make me look bad and to put questions in the minds of my friends and supporters who were going to bat for me at the company.

53. A few days after the termination, National Sales Director (NSD) Pam Higgs called and spoke with Heather Hines of Mary Kay and asked her directly “What did Robin do?” She was told “Oh she knows what she did!” At about that same time, Elite Executive Sr. Sales Director Julie Neal asked Heather Hines what Plaintiff did to be terminated and she was told “It wasn’t the apron…” indicating that it was something else. In that same time period, shortly after the termination, NSD Wanda Dalby and NSD Jeannie Rowland met in person with Darrell Overcash. Wanda stated “Robin does not know why she was terminated.” His response was “yeah, that is the problem, she doesn’t get it!”

54. On or around August 29. 2006, a few weeks after the termination letter was sent to Robin Blackmon-Dunda, the president of Defendant Mary Kay, Darrell Overcash circulated a letter addressed to the National Sales Directors of the company, who are in contact with the rest of the Mary Kay field of Beauty Consultants and Sales Directors, in which he attempted to “spin” the termination of Plaintiff Robin Blackmon-Dunda as having resulted from “repeated unsuccessful attempts” to help her “understand she was doing something wrong.” This letter, a true and  correct copy of which is attached hereto as Exhibit 14, was preceded and followed by comments to individual Mary Kay Sales Directors implying that when the truth came out about the wrongdoing of Plaintiff Robin Blackmon-Dunda, they would better understand why the company had to terminate her, clearly implying that she had done something of a criminal nature justifying her termination, just as the previous Sales Directors had done something of a criminal nature justifying their termination.

55. Defendant Mary Kay’s Overcash’s letter, Exhibit 14 hereto, stating that it was a fact that Plaintiff Robin Blackmon-Dunda had been engaged in wrongdoing in her business relationship with Defendant, and implying she was guilty of criminal wrongdoing, was published to the field of National Sales Directors, and through them, to the entire field of Beauty Consultants and Sales Directors, constituting all of the Mary Kay friends and business associates of the Plaintiff Robin Blackmon-Dunda.

56. The statements complained of hereinabove were false and defamatory.