What Does the Sales Director Agreement Really Say?

In talking with hundreds of current and former Mary Kay sales directors, it is clear to me that many of them didn’t realize what they were agreeing to when they signed their agreements.

It’s not because they didn’t read them before they signed them. It’s because after all the work they had done in DIQ, there was no way they were going to not sign that agreement and become a director. There was simply too much time and money on the line to not finish. And anyway… how bad could the agreement really be if 13,000 other directors had signed it?

But as I looked over the agreement, some things jumped out at me. I’m not an attorney and I’m not giving legal advice here. I’m just giving my understanding of certain parts of the agreement. I think you’ll find this interesting. See all the things you agreed to when you became a sales director…

  • Your appointment as sales director is done at the discretion of the company, and not because you paid them money. (Section 1) (Not directly, anyway, although you probably purchased massive amounts of inventory to meet production requirements during DIQ.)
  • Mary Kay pretends in your agreement that focus of this whole charade is retails sales. “The Sales Director Program is intended to promote the development of a strong independent retail selling organization and consumer market for Mary Kay® products.” They go on to pretend that “wholesale purchases by Independent Beauty Consultants are viewed by Company as a measure of the retail sales activity of the individual Independent Beauty Consultant and the Sales Unit…” justifying it by saying that “all Mary Kay® products not sold to consumers are subject to return to the Company for repurchase by it at the election of any terminating Independent Beauty Consultant.” (4.1)
  • If you quit, are terminated, or even move to a new city, Mary Kay can demand that you turn over your phone number, email, and domain name to them, and they can do with it whatever they want. (6.3)
  • Information in reports you receive, including contact information of consultants and their purchase activity, is considered confidential, and you can’t use or disclose this information for any purpose unless it’s authorized by Mary Kay. (7.3.iv)
  • You agree to assist beauty consultants who want to benefit from your experience and suggestions. (8.1 and 8.2) (Notice that it doesn’t say you’re only responsible for helping those who order more than a certain amount of products from Mary Kay.)
  • You give Mary Kay permission to take from you any tool, instructional material, or sales aid that you make in the course of your business. They can make video or audio recordings of you at any Mary Kay event, and can do whatever they wish with it. They can photograph you and do whatever they wish with it. They can reproduce or recreate anything you’ve made. They can quote anything you’ve said. They can copy any materials you’ve made. They can sell it all, and don’t owe you a dime, and Mary Kay doesn’t even have to give you credit for the idea or words. All of this goes on into infinity. (8.2)
  • You can’t sell Mary Kay products in retail or service establishments or on internet retail or auction sites including eBay or Amazon. (8.3)
  • While you’re a sales director, you can’t sell to any other Mary Kay representative (consultant or director) any products or services which are not “produced, sold or endorsed in writing” by Mary Kay. (8.6)
  • You agree to tell Mary Kay if you know of any consultant who has violated their consultant agreement or has “…engaged in any unfair, unethical, or unlawful business practices.” (8.9)
  • You agree not to use the names, addresses, or other non-public business information you’ve gathered while in Mary Kay to promote or sell any other company’s products to them. (8.10)
  • To not get others to sign up or sell for other companies (8.11)
  • To not get others to quit Mary Kay (8.11)
  • To not sign up with another MLM company for 2 years after you quit Mary Kay (8.11)
  • You can terminate your sales director agreement with 30 days written notice. So can Mary Kay. And they don’t have to have a reason. (10.1)
  • Mary Kay can terminate you immediately (without the 30 days notice) if they believe you’ve violated the agreement by doing any of these:
    • Giving Mary Kay false or fraudulent information to receive an award, bonus, or commission (10.2.i)
    • Putting in an order under someone else’s name (10.2.ii)
    • Doing something Mary Kay thinks may damage its reputation, trademark, or goodwill (10.2.iii)
    • You owe Mary Kay money (10.2.iv)
    • You are physically or mentally “incapacitated,” and Mary Kay gets to decide what qualifies as incapacitated (10.2.v)
    • You voluntarily or involuntarily aren’t actively participating in your business (10.2.v)
    • You violate section 8.3, 8.10, or 8.11. (10.2.vi)
    • You have a dispute with another director or your consultants and Mary Kay thinks it will damage the reputation of the company (10.2.vii)
    • You violate the law or are convicted of a crime which could damage the reputation of Mary Kay (10.2.vii)
    • You miss minimum production for 2 consecutive months and Mary Kay doesn’t think you have “extenuating” circumstances. (Mary Kay gets to decide what qualifies as extenuating.) (10.2.ix)
    • You leave the United States for a total of 90 days or more during a year. And it doesn’t matter why you’re gone. (10.2.x)
  • You can’t sell or give away your unit. (13)
  • Changes can be made to the agreement (including changes to the commission schedule) with 60 days notice. (16.2)
  • If you have a dispute with Mary Kay, you agree to go to court in Dallas only, and you agree that Texas laws will apply. (17)
  • Mary Kay can change this agreement at any time just by sending you an email or a letter. (18)

It’s hard to believe that Mary Kay has this much control over their sales directors. Yet you can see that they have thorough legal advice in crafting this agreement. (Although they haven’t learned how to format things consistently in Word, apparently.)

I was especially surprised at the part that allows Mary Kay to take your materials and use them as they wish, without even giving you credit. (This one hit home with me, as a former director contacted me about a training document she created, which Mary Kay promptly plagiarized. Little did she know she gave them permission to do so in the director agreement.)

So…. were you aware of all these details in the sales director agreement? Mary Kay doesn’t give a copy of this to women before they go into DIQ. If they did, do you think women would go to all the trouble to become a director?

3 Comments

  1. pinkpeace

    “You agree to tell Mary Kay if you know of any consultant who has violated their consultant agreement or has ‘…engaged in any unfair, unethical, or unlawful business practices.’ (8.9)”

    This is the biggest crock. There was a National finishing up her qualifications in my town, and she committed credit card fraud, sold out of a kiosk in the mall, poached other directors’ consultants, etc. My offspring and I documented all these charges and naively reported them to Corporate. Of course, she was bringing in a load of production, and Mary Kay was about to add another bright and shiny National, so nothing was done whatsoever.

    In the meantime, I am convinced that Mary Kay alerted her to my complaint, which was incredibly awkward, as we shared a training center and saw each other frequently.

Leave a Reply

Your email address will not be published. Required fields are marked *