Class Action Lawsuit Alleges Santa Monica Based Fitness Company is an Unethical MLM Scheme

BeachBody, a health and fitness company that sells dietary supplements and apparel, has allegedly been underpaying their coaches for the hours they’ve worked. The Santa Monica-based company attracts its coaches by offering commission off products sales to new customers. As the coaches climb the ladder and recruit more coaches under them, they theoretically begin earning additional income. According to the class action lawsuit filed against Beachbody, in 2021, 25.8% of coaches in the program did not receive a single commission check for their sales.

One of the key aspects of the lawsuit concerns how BeachBody classifies its coaches.  BeachBody has historically classified its coaches as independent contractors. However, new legislation has raised the bar for determining whether a worker is an independent contractor or an employee of the company. The new legislation is the first of its kind that may penalize Multi-Level Marketing (MLM) companies in court, with coaches seeking that BeachBody pay four years’ worth of unpaid wages and business expenses.

If you have worked for BeachBody and feel that you have been illegally underpaid, contact our team of attorneys today by calling (909) 345-8110 or by completing the form.

Why Multi-Level Marketing (MLM) Schemes Can Be Dangerous

Multi-Level Marketing (MLM) schemes are business models that rely on a network of distributors to sell products or services. Participants in MLMs are not only encouraged to sell the products but are also encouraged to recruit others into the network, forming a hierarchical structure. While some MLMs operate ethically, there are inherent dangers and potential for illegality in these schemes. One of the main dangers of MLMs is the emphasis on recruitment rather than product sales. Participants are often pushed to recruit new members, creating a pyramid-like structure where money flows upwards to those at the top. This focus on recruitment can lead to a distorted business model, where the primary goal is to enroll more people rather than genuinely sell the product or service.

Another issue is the requirement to pay upfront costs to join or advance within an MLM. Participants are often pressured into purchasing expensive starter kits, inventory, or training materials, creating a financial burden, and risking substantial losses if they are unable to make sufficient sales. This pay-to-play aspect of MLMs can set new coaches back simply to begin their new job, while also greatly underpaying them for the numerous hours they work. MLMs can also be dangerous because they often make exaggerated income claims to lure in new recruits. The promised earning potential is often unrealistic, leading individuals to invest significant amounts of time, money, and effort into the MLM without fully understanding the low chances of making substantial profits. This misrepresentation can result in financial and emotional hardship for participants who fail to achieve the promised success.

Frequently Asked Questions

Are all Multi-Level Marketing (MLM) schemes illegal?

No, not all MLM schemes are inherently illegal, but more and more MLM schemes are beginning to cross the line into legally ambiguous territory. While there are legitimate MLM companies that operate ethically and within the bounds of the law, there is a fine line between legal MLMs and illegal pyramid schemes. The legality depends on the emphasis placed on recruitment versus product sales. If the primary focus is on recruitment and participants earn money primarily from the enrollment of new members rather than the sale of products or services, it may be deemed an illegal pyramid scheme.

Distinguishing between a legitimate MLM and an illegal pyramid scheme can be challenging, but it’s a crucial step to protect yourself and others. Legitimate MLMs typically have a genuine focus on product sales, where participants earn income from both their own sales and the sales of other employees they’ve recruited downline. They often have a wide customer base outside the network of distributors and offer high-quality products or services at fair prices. On the other hand, illegal pyramid schemes prioritize recruitment over product sales, often require significant upfront costs to join, and promise extravagant earnings solely based on recruitment.

If you suspect that you are being illegally underpaid by Beachbody, it is important to take immediate action to protect yourself. Firstly, educate yourself about the laws and regulations regarding MLMs and pyramid schemes in your jurisdiction. Gather any evidence such as misleading income claims or emphasis on recruitment over service. Next, consult with the Class Action lawyers at McCune Law Group who can assess your situation and provide guidance on your potential Beachbody lawsuit.

How To Start Your Potential Lawsuit Against Beachbody

If you were a BeachBody coach and feel that you were illegally underpaid, contact our team of experienced and professional attorneys today. Our team can guide you through the legal process and get you the compensation you deserve. Here is what to expect during the process:

  • Complete our contact form with all your information so we can best prepare your case 
  • Schedule your free consultation
  • Meet with our Class Action team
  • Discuss your matter
  • Plan your next steps toward recovery

If you or a loved one feels that you have been victimized by BeachBody, contact our team of lawyers today by calling (909) 757-1812 or by completing the form.

Protecting You Against Potential Fraud

The attorneys at McCune Law Group are dedicated to protecting individuals against MLM schemes by providing expert legal representation and advocacy. Our team of lawyers have extensive experience in MLM and consumer protection laws, allowing us to assess the unique circumstances of each case. McCune Law Group attorneys work closely with clients to understand their situation, gather evidence, and develop a strategic approach to protect their rights and interests. We assist clients in navigating the complex legal landscape surrounding MLMs, offering guidance on potential legal remedies and actions to take against illegal schemes. With our expertise and commitment to client advocacy, the lawyers at McCune Law Group strive to safeguard individuals from the dangers and consequences of MLM schemes.

If you need an attorney to represent you, contact McCune Law Group by completing the form or calling (909) 345-8110 today for a free consultation.

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Counsel Richard McCune is licensed to practice only in the state of California.  The law firm of McCune Law Group has attorneys licensed to practice law in AZ, CA, IL, MO, NJ, NY, and PA.  This information section is not intended to be a solicitation for services in states where it is forbidden for non-barred attorneys from advertising for services, and McCune Law Group does not have attorneys barred in that state. McCune Law Group is a national firm that brings lawsuits in a majority of the states. In states where one of its attorneys are not barred, it does so by filing the complaint along with local counsel barred in that state.  

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