BeachBody, a health and fitness company that sells dietary supplements and apparel, has allegedly been exploiting their coaches for low-cost labor. The Santa Monica-based company attracts its coaches by offering commission off product sales to new customers. As the coaches climb the ladder and recruit more coaches under them, they theoretically begin earning additional income. Since the company has a network of an estimated 300,000 coaches, it may seem that this opportunity can be an ideal job for many unsuspecting people. 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 involves how BeachBody coaches are classified. Before 2019, a BeachBody coach was classified as an independent contractor. 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 can potentially penalize Multi-Level Marketing (MLM) companies in court, with coaches seeking BeachBody to pay four years’ worth of unpaid wages and business expenses.
What Is A Multi-Level Marketing Scheme (MLMs)?
Multi-Level Marketing schemes (MLMs) are business models that rely on recruiting individuals to become distributors or sales representatives, offering them the opportunity to earn commissions not only from their own sales but also from the sales made by the people they recruit. The core concept of MLMs revolves around building a network of distributors who actively sell products or services, while also recruiting others to do the same. This recruitment process is often advertised to achieve financial independence and unlimited earning potential. However, it is important to be aware of the potential risks associated with MLMs. Critics argue that the emphasis on recruitment can overshadow the focus on selling actual products or services, leading to an unsustainable and illegal model that preys on the newer distributors. In some cases, the emphasis on recruitment and the pyramid-like structure of MLMs can result in financial losses for most participants.
Some MLM Schemes Can Be Dangerous
The biggest 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 be deceptive and unfair, exploiting individuals who are seeking income opportunities. 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 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.
How can I differentiate between a legitimate MLM and an illegal pyramid scheme?
Distinguishing between a legitimate MLM and an illegal pyramid scheme can be challenging, but it is 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 have 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 Beachbody is exploiting you, it is important to take immediate action to protect yourself by seeking legal advice from a McCune Law Group attorney. 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. Using this information, you can 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 exploited for low-cost labor, contact our team of experienced and professional attorneys today. Our lawyers 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
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 collaborate 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
If you have been victim of the alleged BeachBody MLM scheme, contact McCune Law Group by completing the form or calling (909) 345-8110 today for a free consultation!