| Comment Number: | 522418-00756 |
| Received: | 6/4/2006 5:19:34 PM |
| Organization: | |
| Commenter: | DO NOT DISCLOSE PRIVACYREQUESTED |
| State: | NV |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| Attachment: | 522418-00756.pdf Download Adobe Reader |
Comments:
I am a Member of the Quixtar MLM, and have bee told that I cannot participate in any other business organization that uses a Multi-Level compensation program. The Quixtar "prohibition" extends to even NON-COMPETING businesses. Rules of Conduct Sec. 6.5.1 reads: "6.5.1. For purposes of this Rule 6.5., "Compete" means to own, manage, operate, consult for, be employed by, or participate as an independent distributor in (a) any other direct sales program using a multilevel or "network" marketing structure, or (b) any other enterprise that markets, through independent distributors, products or services functionally interchangeable with those offered or marketed by the Corporation." A copy of the Quixtar Letter to me is attached. I responded that none of the Multi-Leval Compensation programs that I was involve with (i.e.: National Lending Corp., Homeland Realty Corp., Zango, etc.) were in any way "in competition" with Quixtar, which is merely an "online shopping network". Although Quixtar has not threatened me since I sent my response, many others in the Quixtar organization are now afraid to associate with me, for fear that they will be terminated and lose a substantial investment of time and effort to build their groups, including people who are clients of my law practice, which definitely interferes with my ability to provide appropriate legal services to my clients without "interference" by Quixtar. Such overbroad "non-compete" provisions have a definite chilling effect on First Amendment "speech" and "association" rights, and in my view also violate the "commerce clause" (by restraining commerce) and the "involuntary servitude" clause of the 13th Amendment, and should be prohibited. None of the case law dealing with "non-compete" clauses permits the enforcement of non-compete clauses beyond the narrow basis of "direct competition". Therefore I am requesting that you add to the new "Business Opportunity Rule" a prohibition of Overly Broad "non-compete" provisions, by which I mean "non-compete" clauses, howsoever named, which attempt to prohibit any person associated with the business from engaging in any other business which is not in direct competition with the subject business. There is also a disclosure problem regarding such "over-broad" non-competition clauses, since I would never had joined if I had been informed that I could not be associated with any other business merely because it happened to have a multi-level compensation structure, which is now very common in many different kinds of businesses. Although I did read the policy when I first joined, I certainly did not understand it the way Quixtar now interprets it. You may contact me for further information at my email address: . Your time and attention is very much appreciated.