Recently I received a tip that Mary Kay Inc. had sued Allison LaMarr and her company Driven, Inc. I promptly went to research the Dallas court records, and found not only the suit against Allison, but also a whole slew of lawsuits and related court actions filed by Mary Kay.
The lawsuit was initially filed on August 26, 2011, and many of the allegations made by Mary Kay against LaMarr are similar to those made against former MK NSD Amy Dunlap in the lawsuit Mary Kay Cosmetics filed against her. You will remember that Allison left Mary Kay (she called it “retiring”) after becoming “the fastest ever to NSD” and promptly having her earnings tank.
Allison’s message to everyone when quitting Mary Kay was:
“Several years ago I left corporate America as a frustrated employee to pursue my dream life as an entrepreneur. Then, almost overnight, I became a frustrated entrepreneur. Something had to change…I was working extremely hard without ever producing a payoff.”
And now Mary Kay is going after Allison, her (almost ex-) husband James LaMarr, and their company Driven, Inc. for violating the National Sales Director Agreement.
Digging Deeper, the name of Allison’s eNewsletter takes on a whole new meaning, as Allison seems to be digging herself deeper into a hole of failed career attempts, trying to recapture the sparkle she once had as a revered member of the Mary Kay sales force.
Allison LaMarr became a Mary Kay NSD on October 1, 2006. Her contract likely looked like this one signed by Amy Dunlap when she became an NSD in 2005. Mary Kay Inc. alleges that Allison violated the NSD agreement she signed, saying in the complaint:
12. As part of her obligation to use her best efforts to promote the sale of Mary Kay’s product, Ms. LaMarr agreed not to promote, distribute or sell to other members of the Mary Kay independent sales force without Mary Kay’s prior written approval any products or services not produced, sold, or endorsed in writing by Mary Kay. She similarly agreed not to promote, distribute, or sell to anyone products which are not produced, sold, or distributed by Mary Kay in a manner which would falsely designate or suggest, or would likely suggest or indicate such products as originating with, or endorsed by Mary Kay.
13. Nothwithstanding those restrictions, Mary Kay allowed Ms. LaMarr to author, produce, publish, and market original creative works, including books audiocassette tapes and videotapes using Mary Kay’s trademarks, provided however, those materials are submitted for Mary Kay’s prior approval regarding the content, form, and method of distribution of any such work. In executing her NSD Agreement, she agreed that her right to sell or distribute such works is expressly conditioned on entering into an appropriate licensing agreement with Mary Kay.
C. Ms. LaMarr’s Violations of the NSD Agreement
14. Defendant Drive, Inc. is a vehicle for Ms. LaMarr’s motivational speaking and coaching business. As part of that business, Ms. LaMarr created a number of website, including allisonlamarronline.com and allisonsallstars.com, on which she, among other things, linked to Mary Kay’s website and to certain tools, training aids, spreadsheets, documents, and other information designed to assist IBCs succeed (sic) in their Mary Kay business. In addition, Ms. LaMarr offered for sale certain unlicensed creative works, including various DVDs and other materials, that purported to help IBCs and Independent Sales Directors succeed in their Mary Kay businesses.
15. Mary Kay notified Ms. LaMarr in writing that her conduct violated her NSD Agreement. In its letters to Ms. LaMarr, Mary Kay alleged that she promoted, distributed, and offered for sale products and services developed by Driven, Inc. to members of the Mary Kay independent sales force. It also alleged that she promoted, distributed, and offered for sale products and services developed by Driven, Inc. in a manner which was likely to cause confusion regarding Mary Kay’s endorsement, affiliation, or approval of those products. Mary Kay demanded that Ms. LaMarr cease immediately from engaging in those activities. Ms. LaMarr refused to comply with her NSD Agreement and Mary Kay’s demand. Instead, she continued to sell her DVDs, audio tapes, and other materials to members of the Mary Kay independent sales force without Mary Kay’s approval and without an appropriate licensing agreement.
D. Ms. LaMarr’s Termination of the NSD Agreement and Continued Violations.
16. On July 5, 2010, Ms. LaMarr notified Mary Kay of her “early retirement” as an NSD. In her statement, she explained that her retirement would “allow [her] to focus on [her] personal passion of empowering all women in business,” and that she will be “better equipped to serve this purpose as an individual without being actively involved in a particular organization.” Mary Kay confirmed receipt and accepted Ms. LaMarr’s termination notice on July 8, 2010.
How interesting that it appears Allison “retired” because Mary Kay was trying to hold her to the NSD Agreement she signed?
The lawsuit goes on to recite similar NSD agreement provisions as in the Amy Dunlap lawsuit:
… Ms. LaMarr agreed to certain on-going obligations for a period of two years after the termination of the agreement. She agreed not to (1) solicit or recruit Mary Kay’s independent sales force to sell products or services other than those sold by Mary Kay; (2) use any names, mailing lists or other non-public information she obtained during her association with Mary Kay for recruiting or promoting the sale of any other company’s products in the United States; (3) solicit or induce any of Mary Kay’s independent sales force from terminating their business relationship with Mary Kay; and (4) receive any financial benefit from any other company or business organization based upon the solicitation, recruitment, enrollment for such company of any person whom she knows or has reason to believe is under contract as a member of Mary Kay’s independent sales force.
And then we get to the good parts:
18. Upon information and belief, Ms. LaMarr created a website in February 2011 “specifically for [her] MK sisters as a place for [her] to share all of the resources [that she] collected during [her] amazing time with MK. from Consultant all the way through National – and beyond!” She purports to offer a “wealth of free information” in her “Library,” as well as other “valuable resources [that she] created to help catapult yourself to success” in her “Store.” She also solicits users to join her “PINK!” mailing list to receive her periodic “eColumn ‘Digging Deeper,’” which she represents is read by “tens of thousands worldwide.” The website has separate links for “Consultants” and “Directors,” which point to various “MK resources” that she suggests will lead to, among other things, “DRASTIC” and “HUGE” results in their businesses.
19. In additional to creating this website, Ms. LaMarr also accepted employment, or otherwise became affiliated with another direct sales organization that purports to offer for sale a line of skin care products through a “global network of Independent Consultants.” Ms. LaMarr joined this organization as its “Corporate Trainer,” and in that role, has touted her prior experience in becoming “the fastest person in company history to reach the top independent position,” in becoming “the fastest to reach $1 million in team sales,” in having the “highest first year team sales,” and in becoming the “fastest to millionaire status.” Ms. LaMarr appears to be responsible for recruiting and training this organization’s sales force.
20. In late December 2010, a number of IBCs began to receive email solicitations from Ms. LaMarr’s new employer. Some of these email solicitations refer to Ms. LaMarr as a former Mary Kay NSD, and often contain links that feature videos of Ms. LaMarr sharing information in her capacity as a corporate trainer. In February 2011, members of Mary Kay’s independent sales force also began receiving emails generated from Ms. LaMarr’s website.
21. Upon information and belief and within two years from the date of her termination of her NSD Agreement. Ms. LaMarr has used her website to directly or indirectly solicit or recruit Mary Kay IBCs to sell products or services other than t hose sold by Mary Kay.
22. Upon information and belief, she has further used names, mailing lists, and other non-public business information which she obtained during her association with Mary Kay to recruit or promote the sale of her own company, Driven, Inc.
23. Finally, upon information and belief, Ms. LaMarr has sought, directly or indirectly, financial benefit or other compensation based on or associated with her solicitation, recruitment, enrollment or association by employment persons she knows or has reason to believe are under contract as members of Mary Kay’s independent sales force. Her activities and conduct constitute violations of her NSD Agreement.
28. [snip] As described above, Ms. LaMarr repeatedly ignored the restrictions on the use of Mary Kay’s Marks and trade name during the course of her relationship with Mary Kay.
29. Defendants have continued to use Mary Kay’s Marks and trade name n Ms. Lamarr’s website and in her original creative works without authorization or consent from Mary Kay after she terminated her NSD Agreement. Defendants’ unlawful and unauthorized use of the trademarks and name after her termination harms not only Mary Kay, but also Mary Kay independent sales force members and consumers who are confused or deceived into purchasing products through her website believing they are purchasing products from an authorized Mary Kay Independent Beauty Consultant.
30. Defendants’ unauthorized use of Mary Kay’s trademarks and name has also confused or is likely to confuse both Mary Kay IBCs and consumers as to the affiliation, connection, or association of Defendants with Mary Kay, as well as to the origin sponsorship, or approval of Defendants’ products, services, and commercial activities by Mary Kay.
31. Defendants’ misconduct has harmed and continues to harm Mary Kay, its IBCs, and consumers.
Isn’t it interesting that while Allison was raking in money for Mary Kay, they were willing to overlook her violations of the NSD agreement? It was only after she left MK and started recruiting for Bellamora that Mary Kay had a problem with those violations.
What does Mary Kay Cosmetics want from Allison and James LaMarr and their company Driven? A permanent injunction prohibiting Allison and Driven from engaging in these kinds of activities in the future, triple damages for Allison’s activities, an accounting of the sales resulting from Allison’s activities, and that the profit of those activities be turned over the Mary Kay.
What is Allison’s response? She has generally denied every allegation, and affirmatively said that since Mary Kay allowed her to do these things while she was an NSD, they waived their claims:
“… Defendants plead waiver as to Mary Kay’s complaints and causes of action arising from or related to Ms. LaMarr’s and Driven’s actions while Ms. LaMarr was an independent national sales director. Mary Kay had full knowledge of Defendants’ actions and knowingly and intentionally waived any claims that allegedly arise from those actions.”
It is unclear whether Allison is saying that Mary Kay shouldn’t be able to sue her at all for these things, or whether they can’t sue her for the stuff that happened while she was an NSD, but everything after is fair game.
In an amended answer, LaMarr adds the defense that Driven Inc. was not under any written or oral contract with Mary Kay, and therefore it cannot be liable for breach of contract.
Curiously, almost all of the activity on Allison LaMarr’s Facebook page has been deleted between August and December, the time during which Mary Kay was suing her, attempting to serve her with the lawsuit, and receiving her denial.
Both Mary Kay and Allison LaMarr disgust me. There is no honor among thieves. Both Mary Kay and Allison LaMarr are users of people…. use people as long as they fit your agenda (and help you make money), and when they no longer do, sue them.
Is it possible for both sides to lose? Mary Kay and Allison LaMarr are both scum of the earth, so it would please me to no end if they could both lose this lawsuit. At least we can take comfort in knowing that both parties will pay attorneys handsomely to fight this out in court.
Mary Kay is currently trying to depose Bellamora for this case, which means they are seeking documentation and information on the following topics:
- The relationship with Allison and reasons for termination
- Agreements with Allison and reasons for termination
- Services provided by Allison and reasons for termination
- Any creative works created by Allison, including databases and promotional materials
- Marketing plans or sales strategies involving Allison
- Contents and source of any database that includes any Mary Kay member
- Any relationship between Bellamora and any Mary Kay member
Grab some popcorn and sit back and watch. This should be an interesting fight.
Tomorrow we’ll talk about the rest of the lawsuits Mary Kay has launched!
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