Modere’s attempt to obtain an injunction concerning claims of poaching by ex-representatives has been unsuccessful.
In March, Modere initiated legal action against Amber DeLoof, Brynn Lang, Marina Simone, and their separate enterprises for allegedly poaching Modere’s workforce to bolster Frequense.
Countering Modere’s plea for a Temporary Restraining Order and a preliminary injunction, DeLoof, Lang, and Simone put forth two chief defenses; a challenge to jurisdiction and the improbability of Modere’s success based on their case’s merits.
Regarding jurisdiction, the judiciary concluded that as DeLoof, Lang, and Simone had entered into “Social Marketer Agreements” with Modere, “they … acquiesced to the court’s personal jurisdiction.”
Concerning the plausible success of Modere’s case, it was determined that Modere’s Social Marketer Agreements were:
- signed in an upright manner;
- critical for safeguarding goodwill; and
- appropriately confined in duration and geographic scope.
As such, Modere has shown it is probable that the non-solicitation and non-compete clauses present in the contracts under scrutiny are enforceable.
Modere’s strategy unraveled when the court discerned that the “corporate entities” of DeLoof, Lang, and Simone were determined as “relevant contractual participants”.
Modere’s counter was to contend that DeLoof, Lang, and Simone were constituents of these corporate bodies.
The outcome was the court’s finding that DeLoof, Lang, and Simone had breached Modere’s Social Marketer Agreements, though their improprieties did not implicate their companies.
The observed evidence of Defendants’ supposed offending actions … furnishes the court with satisfaction that it … would typify recruiting as per Section 4.9.1.2 of the Policies and hence contravenes the Social Marketer Agreement’s non-solicitation clause.
Further, the court is convinced that the activities and online presence of Ms. DeLoof and Ms. Lang, as detailed above, linked with their Frequense dealings, would typify establishing a network marketing or direct sales competitor and thus violate the Black Agreements’ clause against non-compete during the 90-day interval post-termination of the Social Marketer Agreement.
Modere contends either that the individuals are true parties to the contract (which, for stated reasons, this court discounts) or that the individuals are responsible as per the contract by virtue of Section 4.4 of the Policies.
Bluntly, the position of Modere that its agreement with the Defendant corporate entities obligated the individuals for the entities’ commitments contradicts foundational principles of corporate identity and contractual law.
Should Modere have wished for every member of a business entity to be accountable for the contractual promises of that entity, thereby disrupting rooted, established corporate law principles, it needed to have demanded a personal surety or have all members of the entities affix their signatures in a personal capacity.
TL;DR: DeLoof, Lang, and Simone breached their Social Marketer Agreements by luring away Modere representatives to expand their Frequense network.
However, because they signed these agreements via intermediary companies, the court decided not to hold DeLoof, Lang, and Simone personally responsible.
While this outcome may appear illogical from a pragmatic standpoint (corporate identities are not capable of headhunting individuals), the court underscored its obligation to this verdict based on Modere’s own structuring of its Social Marketer Agreements.
While the decision may seem overly procedural, it is compelled by the agreement the parties made and the structural choices crafted by Modere itself.
Modere made the choice to accept corporate entities in lieu of individual distributors as contract parties, and now implores this court to overlook that decision (and negate the corporate structure entirely).
Consequent to its findings, the judiciary dismissed Modere’s request for a TRO and preliminary injunction on May 17th.
As of the report’s publication, the case docket has no additional updates. Whether Modere will persist the case is yet to be determined.