Depending on the outcome of this round of the litigation, this case has the potential to go to the Supreme Court. Wonder how scared corpse would be then if all their dirty laundry were to be aired? Actually, that might not be a bad idea.
I just spent some time reading the most recent filing in the Mary Kay Inc. v Touch of Pink Cosmetics case. The jury rendered a verdict in favor of Mary Kay, but that verdict has not yet been affirmed or rejected by the judge in the case. Both parties are still filing motions in an attempt to resolve this case.The latest filing, done on May 22, 2009, has several interesting parts. The complete filing is attached here.
One of the issues is Touch of Pink’s claim that Mary Kay had an “unexcused delay” in this matter. Simply put, they’re saying that Mary Kay never really challenged the business of Touch of Pink Cosmetics until filing the lawsuit in May 2008.
Mary Kay knew that Amy and Scott Weber had an eBay store in June 2005. Mary Kay sent Amy letters regarding her alleged breach of her consultant agreement by selling products on eBay. But these letters never complained about the age of the products being sold or the use of the Mary Kay name (two issues which are prominent in this lawsuit). They simply said she was violating her consultant agreement and would be terminated because of it.
In November 2005, the Webers were asked to stop using Mary Kay’s copyrighted photographs on their site and to stop using the words “Mary Kay” in their store name. Again, the company did not object to the actual sale of products on the internet, the selling of discontinued or expired products, or the sale of Mary Kay products that didn’t have a satisfaction guarantee attached to them. (These three issues are also prominent in this lawsuit.)
The Webers complied with the requests of Mary Kay, and had no reason to believe that Mary Kay had any other objections to their business. Mary Kay never told Touch of Pink Cosmetics to stop or alter their business. They simply filed a lawsuit in May 2008. The current filing in the lawsuit says:
The only excuse offered by Mary Kay was from Laura Bietler who said “we never want to file a lawsuit if we don't have to, particularly against a beauty consultant or even a former beauty consultant. It's really the last thing we want to do. So we had to proceed with caution, and we put a lot of careful thought and consideration into making the decision to file this lawsuit. [Bietler 274:12-18, App. 10]. Neither Ms. Bietler nor any other witness ever explains why there was not a cease and desist letter or some other communication to the Webers from January 6, 2006 until suit was filed May 7, 2008.
Why is this important? Mary Kay is trying to get the profits that the Webers earned on the sale of Mary Kay products. However, the Webers are fighting this because Mary Kay basically did not object to their selling of products, and knew they were profiting from this business long before May 2008. They delayed taking action, and therefore may not be entitled to take those profits (if the judge upholds the jury verdict).
This filing in the case brings up another interesting issue, which is the real heart of this article. The Webers are alleging that Mary Kay is simply trying to shut down their business, and I happen to agree. Touch of Pink complied with all of Mary Kay's demands in 2005. Following the filing of the lawsuit, Touchy of Pink has made certain changes to their website and business in response to the new complaints of Mary Kay.
Amy and Scott Weber aren't necessarily agreeing that Mary Kay is right when they make these changes. However, it seems to make good business sense to make some of these changes to avoid more trouble from Mary Kay. Yet it's not enough, in the eyes of Mary Kay Inc. The company wants to stop Touch of Pink from selling any discontinued or expired product, and Mary Kay even wants to stop them from using the name Touch of Pink when reselling Mary Kay products!
Take a look at the changes the Webers have made in an effort to appease Mary Kay:
1. Mary Kay said people could be confused because the disclaimers were not prominent enough – the Webers added a prominent disclaimer in a banner that extends across the top and bottom of each page of touchofpinkcosmestics.com and along the top and other locations on the Touch of Pink eBay store and added the disclaimer to all written communications from Touch of Pink.
2. Mary Kay complained that people could be confused or misled because the Webers were not clear enough about the fact that they offered discontinued, past shelf life and expired products – the Webers added a prominent statement across the top of their internet sites and added that information to all outgoing communications.
3. Mary Kay complained there was too much pink – the Webers changed the color scheme on the website.
4. Mary Kay complained that consumers could be confused about the affiliation between Mary Kay and Sheer Miracle (despite the fact that both are manufacturers and there was no evidence that any consumer associated Sheer Miracle with Mary Kay) -- the Webers added a large notation on the Sheer Miracle page that it is not a Mary Kay product.
And Mary Kay is claiming that Touch of Pink is taking away sales from them. How can that be? The products Touch of Pink sells have already been sold by Mary Kay. The company made money off them. All the money they possibly could. Mary Kay sold those products with the intent that they be re-sold. They are being re-sold. Where is Mary Kay's loss?
The only possible "loss" that Mary Kay could claim is that if Touch of Pink wasn't selling a cleanser to Jane Smith, that Jane Smith would instead buy that cleanser from someone who would have to order it from Mary Kay. It's not good enough that Mary Kay already realized its full profit on that cleanser being sold by Touch of Pink. Mary Kay wants the opportunity to sell a second cleanser to fill Jane's order.
Why is Mary Kay doing all of this? According to this filing:
The fact is that no matter what the Webers do, Mary Kay will complain that their efforts are
insufficient because Mary Kay wants to shut the Webers’ business down, even though the re-sale of Mary Kay trademarked products is permissible under the law.
Mary Kay seems to be trying to put Touch of Pink out of business, which at this point is extremely unfair:
The simple, undisputable fact is that Mary Kay knowingly allowed the Webers to invest substantial sums of money in building a business and to gut that business now would be highly prejudicial. The Webers had a small, home-based business that they operated out of a spare room in their home. After their communications with Mary Kay, and logical belief that their business was not causing Mary Kay any concern, they expanded the operation by increasing purchases, hiring employees and renting a warehouse from which they began to operate their business.
Meanwhile, Mary Kay was receiving communications from IBCs that Mary Kay’s chief intellectual property counsel was informed of and did nothing. Instead, they allowed the Webers to incur great expense. To find that the Webers were not prejudiced by the almost three year delay from when Mary Kay learned of the Webers’ business to when it complained of the conduct at issue is certainly against the great weight of evidence.
Comments (31)
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01 Jul 2009 00:03 | raw joy
Two (unrelated) Points:
1. The Judge can issue a Judgment Notwithsanding the Verdict and has the power to simply set aside what the jury decided and rule otherwise based on the law involved.
2. I saw the movie documentary "Food, Inc." last night. There were several things that reminded me of practices MK Corpse, emphasizing once again that IBCs do, in fact, work for a corporation and all that a corporate world involves.
But they had a segment about when Monsanto basically patented the rights to soybeans, after they had genetically modified them to withstand pesticides (that they also manufactured). They actually gained the rights to soybeans and go around the country trying to find and investigate farmers who insist on growing and using their own seeds instead of Monsanto's. Monsanto sued this old man who had a seed cleaning machine; their stance was that only farmers using their own seeds would use this machine, and therefore they sued the man for "interfering" with the rights of the patent and encouraging others to do the same". It sounded so much like MK suing TOP for interfering with the IBC's contract that I was just blown away. In fact, I had to wonder if they were kind of trying to use that as a precedent.
Hope MK loses this one big time.
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01 Jul 2009 00:09 | raisinberry
"Careful consideration" concerning sueing a former consultant...no da! Great analysis Tracy. Precisely correct, Pax. There's a ton of resellers in America, of all kinds of name brands. This decision could restrict or stop all liquidators- a necessary component piece of good retailing. (I even believe that Mary kay itself uses liquidators...probably in asia!..and most likely "returned product"!)
MK better watch out. Anybody can see they've gotten paid already...or TOP wouldn't even HAVE the merchandise! Mk isn't and never was entitled to their profit! MK doesn't "retail"!! The idea that they miss out on the reorder sale is also hogwash! There is such a glut of merchandise out there that a consumer could purchase reorders of whatever product without a consultant having to place another wholesale order---for YEARS! Consumers certainly aren't ordering outdated merchandise from Mary Kay, so that defeats MK's contention that they are missing a sale!
The retail sale is happening because the PRICE is 1/2 or less of what it retailed for! Without it, who's to say that the consumer would find a new consultant and pay retail? Not likely-they'll hunt for another product. It's price point!
Since MK benefits from TOP buying back merchandise that MK does not have to buy at 90%, the real reason for the suit is clear.
Mary Kay loses potential recruits to the objection, "Customers can buy it cheaper than I can sell it, so why would I do this as a business?"
And when you consider MK's rule that you can't retail from a location, bazaar, craft show or booth...AND you have liquidators like EBAY and TOP selling the glut of goods that previous IBC's have been saddled with, you can see how STUPID MLM enterprises can be.
They want them OUT OF BUSINESS because they hurt recruiting and an Internet search brings up T.O.P and Pinktruth.
We can be explained away as losers who weren't willing to work. But how do you explain thousands and thousands of dollars of unsold merchandise being liquidated from multiple sources, if the "mary kay opportunity" is actually true? TOP, EBAY, and Pinktruth stand as testimony to the truth of what we have been saying---virtually NO ONE is making consistent money selling Mary Kay or they for sure would not "liquidate" it.
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01 Jul 2009 00:50 | chopportunity
I find this disturbing. As pointed out in the above article MK has made their profit when the product was sold to the consultant. This lawsuit is akin to a great white shark, who is never filled and roams to and fro seeking something else to devour. Greed is an ugly thing.
It also makes it clear to me that MK is not about selling cosmetics, it is about recruiting. They fear that those who go on-line will see the massive amout of product that is being sold at huge discounts and wonder if MK products can be sold at retail. This hurts recruiting possibilities. MK has always been and will always be about recruiting and frontloading new consultants. It is obvious that the vast amount of product consultants are purchasing is not being sold on a regular basis at retail. TOP is providing a service to that consultant who came in with far to much product, and who continued to purchase product at the urging of her director. She is being told that stars drive cars, so she buys her way to star. Now that consultant is thousands of dollars in debt and has a basement or office full of MK product she is unable to sell. She can recoup some of her money by selling it to TOP who in turn offers the public the opportunity of purchasing MK at huge discounts.
MK is nothing more than a greedy bully gone wild. They continue to turn a blind eye to the unethical pratices of their NSD's and SD's and instead go after TOP all under the pretense that TOP is hurting their selling of the product.
How anyone can continue to have a relationship with this company, is beyond me.
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01 Jul 2009 01:38 | ciavyn
And Mary Kay is claiming that Touch of Pink is taking away sales from them. How can that be? The products Touch of Pink sells have already been sold by Mary Kay. The company made money off them. All the money they possibly could. Mary Kay sold those products with the intent that they be re-sold. They are being re-sold. Where is Mary Kay's loss?
Holy cow - never even went there in my brain. (Maybe I need more caffeine this morning.) Is that not disgusting or what? This is a capitalist society (okay, it used to be) and if I want to give my stuff to someone else, and that person wants to resell it for a profit, what is wrong with that?
MK IS DANGEROUS. And this is just one more example of how they think they can throw their weight around and get what they want.
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01 Jul 2009 01:48 | The Scribbler
"It also makes it clear to me that MK is not about selling cosmetics, it is about recruiting."
Chop, I absolutely agree. Recruiting is Mary Kay's rock-bottom line. Prizes require qualified recruits, you can't drive that pink Cadillac until you recruit (and frontload) fresh faces, and you don't move up the pink chain of command one lousy link unless you recruit.
Even when MK culture tries to appear noble and caring, the mask eventually crumbles to expose the underLYING recruiting motive. Check out this tripe from NSD Gloria Mayfield-Banks and see if you don't agree - it's a script for handling prospects who keep dodging your calls:
"This is not a script to trick someone into calling you back. It is an example of how you show your concern to others.
"Hi, I'm calling because I'm beginning to worry about you. I'm nervous that something bad may have happened to you. It's so unlike you to return my calls - are you ok?"
Sounds thoughtful, right? No ulterior motive there, just the goodness of one's heart spilling forth like water out of a 9th Ward levee.
Read on, friend. NSD Banks' true motive shines through a few lines later:
"Are you willing to give up on someone who could be your future NSD? I don't think so!"
[IMG]http://i188.photobucket.com/albums/z227/sportica/recruitme-1.jpg[/IMG]
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01 Jul 2009 02:47 | TRACY
This case just keeps getting more interesting, doesn't it? It's a shame the mainstream media hasn't caught hold of it. I would love for the public to be aware of the tactics MK is using.
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01 Jul 2009 03:15 | ciavyn
Scrib - Oh my gosh - it always amazes me at how broad the lies are spread. I remember that exact line from one of her CDs, and it is the same line I was taught to use when a recruit didn't call me back. Disgusting.
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01 Jul 2009 04:43 | Whiz
Why would MK want consultants to liquidate inventory via a third party?
They want consultants to quit, return the inventory, and move along.
This results in three positives to the MK bank:
1. They get the inventory back.
2. They keep 10% of the original sale
3. They get to issue charge backs to (aka collect money from) any upline who received commissions on those productsGee, no wonder they hate Touch of Pink -- it hurts their charge-back abilities!
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01 Jul 2009 04:51 | puc4now
I have a very nice gift package of Lancome's perfume and body lotion. Each item is marked "Not for Individual Sale." It's only sold as a gift set.
Maybe MK should mark each item they make with "Not for Individual Sale. Sold only in large inventory packages shipped directly from the Mary Kay warehouse." That's the only sale that matters to them. They should just quit the pretense of retail selling altogether and recruit women by saying "Hey, we got a pink pyramid going. You want in?". It would save a lot of IBCs the heartache of trying to "play store" and run a pretend business.
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01 Jul 2009 05:02 | pinksedition
Good point, Puc! It would save a lot of time, effort, and money for everyone. MK could probably even save themselves money on advertising. LOL!
Hey Tracy, I'm sick that mainstream media hasn't run with this one. I wish even some of the alternative places like smoking gun would pick it up. Maybe they think no one would care. I sure wish someone would do a huge expose on MLM's like MK, Avon, etc. The info needs to get out there.
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01 Jul 2009 05:33 | Pax
Whiz,
Most of us sold our remaining products to a liquidator after sending back our inventory to corpse. I'd have to say that the majority of consultants that return their drek can't send everything back (unless they are brand new) and liquidators are a viable way to get rid of the remaining products.
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01 Jul 2009 05:34 | TRACY
In the year that this lawsuit has been alive, Kaybots have insisted that MK just wants TOP to play fair and not harm consultants...
The actions by MK make it clear that's not the case.
TOP is really the company helping consultants. They are the place to go for women who have been frontloaded and can't or won't send their product back to MK. At least they can recover SOME Of their money.
And this isn't about being "fair." MK has gone far beyond that. Each time TOP meets one of their demands, there are new and more outrageous demands by MK to follow.
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01 Jul 2009 05:40 | pinksedition
I hope MK gets creamed on this at some point. I hope TOP whoops them in court eventually. Corpse is getting ridiculous.
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01 Jul 2009 07:19 | madamchair
This is awesome. A couple of you made a suggestion I would like to speak about but don’t want to do so here. I have only visited the discussion board once and would like to post something there. I do not know how to start a new discussion. Please assist.
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01 Jul 2009 07:28 | dupedbypinkfriend
Madam, when on the discussion board, click Categories, choose one that fits your questions and click. Then you'll see a little green box at top that says New Thread. Click and name your thread, then add message.
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01 Jul 2009 07:40 | didpinkawhileago
I personally think that directors and above also use TOPS to unload their old product since its just sitting there anyhow.
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01 Jul 2009 07:54 | The Rose
To MKC - and I know you're reading here!:
Your ridiculosity just makes me go to TOP's website and buy more from them.
Who is to say that IF you shut them down, they won't reopen a new website under another name?
The money you're wasting on legal could be better spent elsewhere.
SO glad to be out of this company!
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01 Jul 2009 07:58 | pinkpunch
Kaybots have insisted that MK just wants TOP to play fair and not harm consultants...
The actions by MK make it clear that's not the case.
TOP is really the company helping consultants.
Gosh, this is so true but those consultants do not even realize, yet, how they "will" be needing TOP. They do not even know that NSD's and SD's have been dumpiing products, too. They have no clue! I have tried to tell some consultants and they just do not want to hear it. They just won't believe it. I didn't know that other SD's did that until I was an SD, for quite a while. I had no clue, either. The only way that I knew this was b/c I found out that my own ex-SSD got busted for selling her overload, of products, on Ebay.
I'll bet that the SD's that have been dumpimg products are now, "secretly", concerned. I mean how are they going to buy their goals AND try to make some of that money back?
I have a feeling that no matter which way MK swings their bat...their end is coming. Maybe not soon enough but it is coming!
All of those SD's that bought their own way up will no longer have a place to dump it. Which means, eventually, they will have to stop buying their way up! It's still a catch 22 for MK.
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01 Jul 2009 10:26 | PUNKEDBYPINK
I wonder how many times MKC has filled an order for a "pet" or a dead grandma.
Doesn't matter. They know what goes on, but they turn a blind eye. It's only when "Fido" sells his stuff to TOP, then the sh** hits the fan. How much of Great-grandma Ethel's stuff is on the TOP web site now? It seems that corpse can break their own rules to get it sold...a bit of a double standard don't cha think? :s
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01 Jul 2009 11:59 | SuzyQ
And MKC doesn't care about the "cc declined" orders for multiple orders for one consultant, and the same consultant being passed from unit to unit in the same year, or our Nigerian buddies... this is ridiculous and the under the radar unethical practices need to be disclosed. HEY LURKERS---> That MK is the #1 best selling brand for the last 238 years claim? That sale is to YOU! Get that? The first sale is to YOU! The resale of that order is your fervent hope, and when that doesn't happen, TOP bails you out of financial ruin. MK does not.
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01 Jul 2009 13:24 | What
[quote]And Mary Kay is claiming that Touch of Pink is taking away sales from them. How can that be? The products Touch of Pink sells have already been sold by Mary Kay. The company made money off them. All the money they possibly could. Mary Kay sold those products with the intent that they be re-sold. They are being re-sold. Where is Mary Kay's loss?
[/quote]
There IS no loss to MK. The loss is STILL with the consultant or former consultant because they can only sell to TOP for about 50% of wholesale (and don't forget the shipping to TOP). My beef with the whole thing is that MK is yet again trying to screw the lowly IBC.
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01 Jul 2009 14:42 | madsmom
I just placed my first order with TOP on Sunday night. Received my order today. Very fast and I didn't have to pay double shipping and sales tax. If MK puts TOP out of business, I'm done with MK products. What's next, go after the IBC for reselling products?
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01 Jul 2009 22:05 | The Artist
I really like this article. Thank you for keeping us up to date. This is the kind of stuff I turn to PT to learn about.
I feel very sorry for the Webers. I wonder what this lawsuit is costing them in money, aggravation and stress. I hope it will be worth it to them in the long run.
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02 Jul 2009 05:08 | outsidethepinkbox
Mk should worry about their own unethical practices - lie, cheat & manipulate women, basically financial theft by deception.
I wonder if anyone, IBC etc., has ever tried/considered filing a lawsuit against directors n such & MK Corp. for business deception, FRAUD - I'm sure there is a legal term to do so.
It would only take 1 successful lawsuit to nip this financial racket in the bud.
Not only the above, but these directors n such while representing Mary Kay Corporation continually & knowingly violet city ordinances as well. I know of a neighborhood that is considering filing such a complaint against MK.
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02 Jul 2009 05:17 | pinkpunch
[quote]violet city [/quote]
[quote]^of course not Violet
I meant VIOLATE[/quote]
Whew, I'm glad you cleared that up cuz it was way too close to pink, for me!
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02 Jul 2009 05:42 | outsidethepinkbox
^
Sometimes the ol brain is thinkin one thing whilst the fingers are typing something else.
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02 Jul 2009 06:30 | pinkpunch
I hear ya! If I had a dollar for every one of my typos, my MK debt would be just about paid off!
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