Legal Question in Business Law in California

While attending a RE (real estate) seminar recently, I came across 2 totally different network marketing (NM) opportunities that seemed to be outstanding, and duly signed up for them. In fact, they were introduced by the RE seminar guru who was already signed up in each of them, so I stand underneath him in the hierarchy of each one (which is actually very fine for me).

At least one of the NM outfits has a clause saying, "I will not sponsor or attempt to sponsor any (the NM company) Rep directly or indirectly into any other network marketing program . . ." This seems to be in restraint of trade, at least, and puts me in a difficult position, as I'd like my customers and enrollees in either NM to be free to use the other. My RE guru has obviously already ignored it. What's the legality and/or enforcibility of that restriction, please?


Asked on 8/15/10, 8:50 pm

3 Answers from Attorneys
Michael Stone Law Offices of Michael B. Stone Toll Free 1-855-USE-MIKE

You used poor judgment in signing anything at a seminar -- why didn't you take the contract home and have it looked at? Now you are bound by whatever you signed. You also used poor judgment in having anything to do with "network marketing," whatever that is.

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Answered on 8/20/10, 9:21 pm
Anthony Roach Law Office of Anthony A. Roach

Whatever happened to the MLS?

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Answered on 8/21/10, 8:13 am
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

I'd guess the clause is enforceable, as it doesn't seem to be sufficiently in restraint of trade to attract any anti-trust enforcement. Basically, it's akin to a company's requiring that people it hires to do sales work sell for it, and not for the competition.

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Answered on 8/21/10, 12:14 pm


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