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Mary Kay Cosmetics Sues Liquidator and Threatens Consultants

Sue Quietly and Carry a Big Stick

By Lazy Gardens, published May 17, 2008
Published Content: 27  Total Views: 64,877  Favorited By: 10 CPs
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Mary Kay Inc., the Dallas-based cosmetics company, quietly filed a civil suit in the Federal District Court of Texas against La Salle, Illinois residents Scott and Amy Weber and their company, Touch of Pink Cosmetics. Touch of Pink resells Mary Kay products on the internet. The suit alleges tortious interference with current and prospective contracts, unfair competition, passing off, and trademark infringement.

Translated from legal-speak, tortious interference means the Webers are accused of inducing current Mary Kay consultants to break their contracts with Mary Kay. Mary Kay also alleges that the Weber's thriving business selling Mary Kay products at a steep discount has deterred and will continue to deter women from signing contracts with Mary Kay.

The 71-page complaint contains a brief statement that may be of interest to any current Mary Kay consultants who are using liquidators to recoup some of the money they sank into hard-to-sell inventory: "Mary Kay requests leave of the court and an order to conduct expedited discovery so that Mary Kay can properly identify the Participating Independent Beauty Consultants, who are also potential defendants in this lawsuit, prior to the preliminary injunction hearing and for purposes of judicial economy." This is what lawyers call a"fishing expedition". Mary Kay wants to rummage around in the Touch of Pink business records to get information they can't get in any other way.

Given that tortious interference is an act that can't be committed between two parties to a contract, and that the alleged trademark infringement is by the Webers, one wonders exactly why these consultant would be defendants? Against which of the complaints? At worst, it would show that they have violated their contract with Mary Kay and the contract would be terminated. Is this meant to intimidate existing consultants who may be tempted to dump unsalable product to recoup some of their money.

Mary Kay Cosmetics Sues Liquidator and Threatens Consultants

What you think about, you bring about.

Credit: yenhoon at sxc.hu

Copyright: yenhoon at sxc.hu

Takeaways
  • Mary Kay Inc. is suing a overstock liquidator.
  • Mary Kay Inc. is threatening that some of their consultants may be sued, too.
  • Shutting down the resellers is meant to protect the prices the consultants can charge.
Did You Know?
In 2006, Mary Kay Inc. had 1.7 million consultants and only $2.25 billion in wholesale sales. That's $1300 gross income per consultant, if she manages to sell everything and has no expenses. Interesting fact, isn't it?
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Comments
Comments 1 - 4 of 4
 
 
Melinda, are you aware that Mary Kay will only buy back 90% of what you have purchased IN THE LAST 12 MONTHS? If you have been a consultant for more than a year, don't expect to be able to return all of your product Yep, that is something I bet your director, like mine, forgot to tell you. You only find out when you call Mary Kay to find out the return procedure. Directors are fully aware of this tidbit of information. I had a recruit who wasn't able to return ANY of her product because a year had passed. As for being lazy, talk about being judgmental...and Mary Kay is supposed to be a faith based organization. Judge not lest you be judged, Melinda. I say hats of to Touch of Pink for helping the poor souls sucked in. I managed to escape without their assistance, but there are thousands of women out there who need their help. No matter what your director tells you, Mary Kay does NOT have "your best interests" at heart. Mary Kay is only thinking of their bank account.

Posted on 10/05/2008 at 8:10:19 AM

 
If Melinda's comment were true, there would be no need for a company like "Touch of Pink." The only reason why they have a thriving business, (thriving to such an extent that the mega company, Mary Kay is shaking in its wake), is because there are so many independent consultants who were front-loaded products that they are willing to take a 50% loss on their "investment." This just shows that Mary Kay is feeling the backlash from their own bad business practices.

Posted on 09/24/2008 at 8:09:13 PM

 
Mary Kay is not "hard" to sell. It is super easy if you are working your business. If you sit around waiting for someone to knock on your door then it is hard to sell. The only ones not seeling Mary Kay are consultants who are lazy. Also, you can return Mary Kay to the company and they will buy it back from you for 90%. No other company does that. It's really sickening how people will say or write anything to put down a respectable company and opportunity.

Posted on 09/24/2008 at 5:09:58 PM

 
The docket and links to what each side files, can be found here: http://dockets.justia.com/ if you search. It's the Texas Federla District Court, Northern Division, case number: 3:2008cv00776

Posted on 05/18/2008 at 10:05:04 AM

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