What Does the Sales Director Agreement Say?

In talking with thousands of current and former Mary Kay sales directors over the last 20 years, 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 would turn their nose up at the agreement. They were going to sign it no matter what it said. 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 under a current MK consultant/director 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?

16 Comments

  1. Destiny Angel

    Some of these appear to be similar to standard business procedures

    “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.”

    My husband patented several items for the company he worked for: while his name is on the patent , it’s the company’s intellectual property. Likewise all the training manuals he wrote belong to the company.

    Being terminated without notice

    Doing something Mary Kay thinks may damage its reputation, trademark, or goodwill
    You are physically or mentally “incapacitated,” and Mary Kay gets to decide what qualifies as incapacitated
    You voluntarily or involuntarily aren’t actively participating in your business
    You violate the law or are convicted of a crime which could damage the reputation of Mary Kay

    Those appear to be very similar to many job contracts I’ve seen either mine or my husbands. No company wants the be known as having an embarrassing director or one that hits the headlines in the wrong way.

    To not sign up with another MLM company for 2 years after you quit Mary Kay

    That looks like a fairly standard non-compete clause, my husbands signed similar agreements during his working life.

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    1. MultiLevelMoneyLosing

      Right; but I bet your husband is an employee and gets benefits (health insurance, 401k) and other protections as such.
      MK directors are still just consultants and don’t get any benefits. MK also has additional ability to sue their own directors under the law and much less responsibility for the sales forces’ actions compared to an employer/employee relationship.
      Wake up — making the sales force consultants isn’t a standard business practice and ONLY benefits Mary Kay corporate! When I sold Clinique, I was an employee of Estée Lauder Inc. (and they paid for my white coats). Why does MK do it differently?

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    2. NayMKWay

      You’re making a false comparison, Destiny Angel. Your husband was a salaried employee; his patents were paid for in advance of the inventions’ development, at the company’s risk, in the form of paychecks and benefits. The company also bore the costs of obtaining the patents, which can be substantial (trust me). Furthermore, your husband was made aware of the arrangement before he started work there; it was in the employee contract.

      Hiring an employee is a risk buy; it’s a company investing in the hiree. Mary Kay risks nothing because the consultants pay for everything: they pay to sign up, they pay for equipment, they pay for inventory, they pay for conferences, for free samples, for hostess gifts, etc. etc. If they create sales aids, they do so on their own time, with their own money. For Mary Kay to claim ownership of something they didn’t pay for is organized theft.

      Then Mary Kay waits until after the grueling process of DIQ to spring that little tidbit on the exhausted candidate, knowing how emotionally invested the candidate is. That’s just messed up.

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    3. AnonyMouse

      So here’s the problem. Mary Kay directors are asked to sign this agreement, which might be standard in a traditional company-employee relationship. But the Mary Kay business opportunity is advertised as a chance to “be your own boss”, “own your own business without the overhead”, etc. This is the narrative that is pushed at every consultant level. They appeal to potential recruits with the idea of having so much freedom in your “business” and in your life, when in reality the company owns you, and you have few to no rights. It’s deceptive, it’s unfair, it’s unethical, and it’s what Pink Truth is working to expose. They lie and conceal information and then if you question them about it, they gaslight you into believing it’s for your benefit. They don’t share the director agreement with you before you enter the Director In Qualification process. They don’t share the Consultant Agreement with you before you agree to sign up. They keep feeding the lie to the masses that their consultants are “business owners” when in reality they have even fewer rights and protections and benefits than traditional independent contractors in the workplace. It would be one thing if they went into it knowing ALL the information, but they don’t, because if they did nobody would sign up for the Mary Kay “business opportunity”. And they know it.

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    4. Lazy Gardens

      “My husband patented several items for the company he worked for: while his name is on the patent , it’s the company’s intellectual property. Likewise all the training manuals he wrote belong to the company.” He was PAID a salary while he did the inventing and writing, wasn’t he? Mary Kay takes your work without payment.

      1. NayMKWay

        I have a dozen or so patents myself, so I’m familiar with how they work. By law, patents the U.S. may only be granted to individuals, not to corporations. Corporations acquire patent rights via assignment. When a tech employee is hired, their employment contract will have a clause that states the employee agrees to assign all rights to any inventions to the company. That’s the trade-off: the company pays you a guaranteed income, provides lab space and equipment, and takes ownership of whatever inventions come out the other end. If you want to keep the rights to your inventions, you will have to pay your own way.

        Mary Kay makes everyone pay their own way, and then steals their ideas. NOT the same thing.

        1. NayMKWay

          Reading my own comment (above), I realize I may have given the wrong impression. I am not some crackerjack inventor bragging about my accomplishments; I have just worked with teams who developed new technology and got some of it patented. Since I was a member of the team and worked on the development of the invention, my name is on the patent. In the fast-moving tech industry, this happens quite a bit, especially when you are privileged to work with really smart people.

    5. TRACY

      Terminated without notice: The problem here is that you can be terminated for any reason (or no reason at all) under the consultant agreement. You own nothing. You don’t own your customer base. You don’t get to transfer or sell your unit. You are left with nothing.

      It doesn’t work the same way when you’re an employee. You have protections when you’re an employee.

  2. NayMKWay

    “To not sign up with another MLM company for 2 years after you quit Mary Kay (8.11)”

    That seemed so unreasonable I had to download and read the contract for myself. I must have reread that paragraph (the second mention of “2 years” in 8.11) ten times, and I still am not sure what it means. But I don’t think it means you can’t go to work for any other MLM, just one that is somehow associated with a Mary Kay consultant. In plain English, I think the two paragraphs can be summed up this way:

    1. No poaching fot 2 years.
    2. No letting yourself be poached for 2 years.

    But as I say, the incessant use of conditional clauses makes both paragraphs well nigh inscrutable.

    This is the clause that jumped out at me, though:

    “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)

    “ALL”?? Bull. They won’t take back discontinued items, anything sold to the consultant more than one year prior, or anything the consultant didn’t personally order from the company. And of course there is the coercive policy of being excluded from rejoining if you return anything. That phrase is a blatant lie, and they know it. What a crock.

    1. Mountaineer95

      I’ve had three actual jobs (in sales) which each had non-compete clauses that were similar. Basically, I couldn’t quit and then immediately go work for an industry competitor. IIRC, at least one of them didn’t enforce the clause if the employee was fired or laid off. But with my last position (giftware wholesale), one of my colleagues who had the territory adjacent to mine had interviewed with our top competitor (who offered an overall better compensation package and work environment) but this competitor backed off my friend when my employer actively pursued enforcement of the non-compete with a different colleague who’d been hired by this competitor just prior. I think for some companies it has to do with keeping competitors from gaining proprietary information (probably more in the tech and medical sectors) and for others has to do with poaching customers. I’d think that for MLM in general, the latter is more the reason, because the “customers” are the actual recruits and they don’t want you jumping MLM ships and taking your recruits (ie their customer base) with you. I doubt product “secrets” have anything to do with it, since MLM rarely have cutting edge products (the products aren’t really relevant at all, as we know, in product-based pyramid schemes.)

      1. NayMKWay

        I work in tech (electronics engineering consultant), and I’ve had contracts pushed at me with non-compete clauses. I politely tell them I’ll be happy to sign it if they put me on retainer at full salary after contract termination for the duration of the lockout period. Or we can agree to strike that clause, which to date they have all been willing to do.

        Sometimes (when I’m feeling cheeky) I’m more succinct: I highlight the clause and write in the margin, “Would you sign this?” They ruefully agree they would not.

        Now, lest I come off as too abrasive, let me hasten to add that I preface all feedback with a statement that I understand they are just presenting me with the contract given to them by their legal counsel, and that naturally said counsel will prepare something that is maximally beneficient to their client. Now let us work together to create something we both can agree to.

        Indemnity clauses are another sticky wicket. Don’t get me started…

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  3. Shay

    oh pulease! I have heard of people being Sales Directer and their whole units and off spring are family. The K Bot maybe had a couple legit recruits.. but she literally bought her way (and put her family in debt)
    MaryKay don’t track retail sales. You buying is the customer= you the customer.

  4. Autumn

    Among my several dead horse arguments is contracts like these should be written in language a 6th grader can understand. But with this one, it should probably be required to be presented and explained as the person is starting their DIQ process.

    I would apply the simple language rule to any consumer contract, including loans and credit cards.

    However that comes under Autumn’s house whine “but that would make sense!” MLM never will make any sense, so the above will never happen. The good news is that Pink Truth exists and shares traps like this so folks can find them.

    My sister-in-law went Gaga for Lularoe, at least until the product quality took a nosedive. At one point I thought I was going to have to stage a “don’t do an MLM” intervention on her. But she backed off. She still thinks she was helping her friends….

    1. NayMKWay

      When I saw the cover page with the title “WITNESSETH” followed by several paragraphs that started with “WHEREAS” I thought, Really, Mary Kay? Really?

      Maybe there’s some Texas regulation that reqiures that kind of language on contracts, but I doubt it. I’ve read a LOT of contracts in my career, from lots of different U.S. states (maybe even Texas, for all I can remember), and exactly zero started out with the archaic “WITNESSETH” in all caps.

      It comes off to me like they’re trying to intimidate the candidate: “What thee are about to witnesseth comes down from The Beginning. Dare not question it, lowly DIQ, for yea, the gods of law have blest it.”

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