Direct Sales Industry

Direct Sales Industry Legal Services

The Direct Sales Industry Group helps clients to better understand the regulatory and competitive environment in order to maximize their ability to operate within it. Our attorneys closely interact with their clients as business partners: Our job is not only to protect your bottom line in court but to enhance it by helping you develop best practices for your operations, afforded by our intimate understanding of the laws affecting them.

Quarles & Brady has represented direct sales companies since the early 1980s. We currently serve as general counsel for direct sales companies with combined annual sales in excess of $3 billion, related foreign operations in over 100 foreign countries, and millions of distributors in interrelated companies throughout the world. The acumen of our attorneys in labor, tax, international, regulatory, intellectual property, Internet, products liability, healthcare, litigation, and corporate law in general — combined with years of experience in the myriad of specific issues confronted in the direct marketing industry — allow us to provide practical and cost-effective counseling. We have an excellent track record of assisting our clients to avoid distributor disputes and to defend against competitor raiding of one of our clients’ most important assets, the distributor base.

Our Group can provide you with experienced attorneys in all phases of your business, all over the world. The multilingual skills of our international practice group have proven invaluable in establishing international operations and addressing issues in foreign countries. The Firm is a member of the Direct Selling Association, with attorneys active in its Lawyer’s and Internet Councils working on specific taxation, internet and regulatory issues.

Quarles & Brady’s Direct Sales Industry Group prides itself on being able to address the complex legal issues those involved in the direct sales industry face. We address those issues in a manner that allows compliance with applicable laws and regulations without unnecessarily interfering with the business success of the company. We help our clients to better understand the regulatory and competitive environment to maximize their ability to operate within it. Our primary goal is to help you avoid legal proceedings — for example, we strongly support efforts at alternative dispute resolution — but when the need arises, we have substantial experience in federal and state courts throughout the United States, which can be called upon to successfully defend, protect and vindicate our clients’ interests.

In short, our bottom line is all about improving your bottom line.

Service Offerings

The Direct Sales Industry Group offers comprehensive legal services, including the following:

Compliance Reviews

• Distributor compensation plans, distributor handbook provisions and policies for compliance, including advising regarding issues related to front-loading, anti-pyramid safe harbor, buy-back provisions, refund policies, exclusivity provisions, conflict of interest policies, tradeshow policies, sales receipt policies, check legends, confidentiality/trade secret provisions relating to upline/downline, income representations, disclosures and recognition programs, product claim review and disclaimers, and testimonial reviews.
• Dispute resolution policies, mandatory arbitration policies and impact on availability of class actions.
• Business method and promotional tools policies.
• Starter kits, promotional materials, Web site audits, telephone recordings, audiotapes and DVDs for FTC and regulatory compliance.
• Audit/compliance review and policy enforcement programs to achieve greater distributor compliance, lower regulatory risk and mitigate damages in the event of regulatory audits.
• Trademark/copyright issues relating to distributors’ use of film clips and news articles.
• Telemarketing and Consumer Fraud & Abuse Prevention Act and policies regarding unsolicited faxes.
• Telephone Consumer Protection Act in connection with autodialers and recordings.
• Policies relating to preserving independent contractor status and limiting potential exposure to liability for acts of distributors.
• Distributor termination issues, including necessary documentation, procedures and terms.

Internet-related Law:

• Website distributor policies, including use of template content, use of trademarks, domain name and email policies, use of hyperlinks, banner ads, and auction policies.
• Anti-spamming compliance policies under the federal CAN-SPAM Act.
• State law privacy and data security law requirements, and company privacy and data security policies.
• Creating binding online contracts pursuant to federal E-SIGN law, disclosure requirements and notice requirements relating to material policy changes.
• Trademark infringement issues, including use of trademarks in metatags and search engine pay-per-click sponsored links.
• The Digital Millennium Copyright Act, regarding copyright claims and limitations on liability.
• The Anti-cybersquatting Act, regarding hijacking of trademarks in domain names.
• Antitrust issues relating to pricing for online distributor sales.
• Auction site policies and enforcement.

Litigation and Arbitration Matters:

• Litigation and counseling advice regarding “gripe sites,” negative spam campaigns and defamation claims.
• Temporary Restraining Orders and preliminary injunction proceedings to prevent distributor raiding, and breach of contract claims, trade secrets violations and copyright and trademark infringement claims.
• Other areas of law include class actions, arbitration actions, unfair competition, RICO claims, product liability claims, TCPA claims, and FTC/AG actions.

For more information on how our Professional Liability Team can assist you with your dispute resolution needs, please contact Kevin D. Quigley at (602) 229-5433 / , Deanna Conn at (520) 770-8715 / , Jeffrey Morris at (414) 277-5659 / or your local Quarles & Brady attorney.