While Big Sister Heartwell was pandering to anti-war protesters, an even bigger band of malcontents was making a scene in downtown G.R. on Monday. Over a hundred Quixtar distributors gathered in front of the Kent County Courthouse to oppose Amway's threat to fire them if they do not pledge loyalty to Amway instead of the kingpin distributors who filed suit against the company in dispute over the sale of "tools" (i.e., marketing gimmicks and motivational seminars) to "downline independent business operators" (i.e., suckers who buy Quixtar products thinking they can make money selling the stuff to others).
As most of you know, seven years ago Amway reorganized itself as Alticor with Quixtar as the subsidiary for the North American soap-and-vitamins multi-level marketing business. Essentially Quixtar was a rebranding of Amway, but it merely put lipstick on the pig. None of the crappy way of doing business changed. Amway made its money providing the come-on, membership as an "independent business operator" selling Amway products, for its kingpin distributors to lure marks into their distribution networks where they could then make money pressuring the greenhorns into buying those useless "tools". Recently Amway has come under public scrutiny around the world to control its kingpins and clean up the dirty "tools" business.
It appears that in response to the scrutiny, Amway Chairman Steve Van Andel and President Doug DeVos are trying to make a real change in the company's culture this time. Whether this is part of a long-term plan to remake Amway from a multi-level marketing scheme to a private label manufacturer is not clear, but Van Andel and DeVos publicly committed themselves this past June to reining in the "tools" business of their kingpins. Apparently that was a declaration of war between Amway and the kingpins, and the long knives came out. Amway purged itself of the most notorious of the Quixtar kingpin distribution networks -- TEAM, Legacy, and Team 5K -- and their operators have in turn just filed suit against Amway in a California federal court alleging that they were victims of the illegal pyramid scheme operated by the company. (You almost have to admire chutzpah of the accessories of that scheme calling themselves victims of it. But then there is no honor among thieves.)
Consequently Amway demanded an oath of loyalty from its remaining top Quixtar distributors. Either they side with company against the purged kingpins, or they will be immediately fired or suspended. A number of these distributors rebeled and filed their own suit against Amway in the local state court. On Monday their attorney asked Judge Paul Sullivan for an injunction preventing Amway from changing their status until the federal court in California sorts out whether or not Amway is an illegal pyramid scheme, and they showed up en masse in front of the Kent County courthouse to hear the judge's decision. They didn't get it. Sullivan said he will make his decision today.
Whatever the immediate outcome of these legal battles, it looks like the house of cards that always was the Amway multi-level marketing business is falling apart.