I continue to hear stories of the behavior of Amway Corporate officials that are extremely disheartening. The once proud free enterprise organization that survived and thrived for over 40 years without a non-compete or other fascist like principles has now reached all-time ethical lows, in my opinion. I will share the basic free enterprise principles on the right to own property that Rich Devos and Jay Van Andel espoused frequently and expose the real life behavior of the Amway Corporate officials. You be the judge of whether Amway is practicing free-enterprise or Neo-Fascist behavior. I believe there are some good people at Amway Corporate, but think the power hungry, heartless lawyers and bureaucrats have taken over this once great company. I pray that Rich Devos cleans house and corrects this unconscionable behavior before Amway loses their legacy and their entire distributor force. Here are the standard principles that define property ownership.
Traditional principles of property rights includes:
1. Control of the use of the property – You can choose how to use the property and what to do with it at any time.
2. The right to any benefit gained from the property (examples: mining rights and rent) – It is your property and if there is an income earned then it is yours with no questions asked
3. A right to transfer or sell the property – At any juncture where you decide to no longer own the property, you have the right to sell on the open market.
4. A right to exclude others from the property – No one can take or co-own your property without your direct approval
If any other the four principles are missing, then you do not really own the property. To the degree that the principles are missing, determines the degree that you no longer own the property. Fascism is a form of governmental control of private property. Let’s review the American College definition of Fascism.
The difference between [socialism and fascism] is superficial and purely formal, but it is significant psychologically: it brings the authoritarian nature of a planned economy crudely into the open.
The main characteristic of socialism (and of communism) is public ownership of the means of production, and, therefore, the abolition of private property. The right to property is the right of use and disposal. Under fascism, men retain the semblance or pretense of private property, but the government holds total power over its use and disposal.
The dictionary definition of fascism is: “a governmental system with strong centralized power, permitting no opposition or criticism, controlling all affairs of the nation (industrial, commercial, etc.), emphasizing an aggressive nationalism . . .”
In my opinion and based upon mine (and many others) experiences with Amway Corporate – all we would have to do is change governmental to business and nationalism with corporatism and we would have an accurate definition of Amway Corporate.
“A business system with strong centralized power, permitting no opposition or criticism, controlling all affairs of the corporation (distributors, accreditation, bonuses, legal and training companies), emphasizing an aggressive corporatism. . .”
Let’s see how well this definition fits the behavior of Amway over the last year.
1. Strong centralized power – Nothing is allowed to be changed without the express approval of Amway Corporate. Amway can change their North American operations back to Quixtar regardless of whether 75% of the people had never been in Amway. The have total centralized control. Amway Corporate is making billions while many of the distributors are going back to work due to the failed policies of the corporation.
2. Permitting no opposition or criticism – Amway Corporate sued numerous bloggers and field leaders for daring to question the failed policies of Amway/Quixtar. Any criticism or opposition is addressed with a lawsuit or threatened lawsuits. The old saying, “If the only tool you have is a hammer then everything looks like a nail” applies here.
3. Controlling all affairs of the business (distributors, accreditation, bonuses, legal and training companies.), emphasizing an aggressive corporatism- Distributors have no choice of whether to come or go due to the non-compete. Distributors are not allowed to start a new career for six month after signing a Quixtar application. The non-compete was not even in the distributor contract that they signed. Accreditation was promised to be optional, but Amway stated the next year to not pay any bonuses to distributors unless they were part of an accredited system. Privately held training companies would be controlled by Quixtar or they would terminate your contract. If you opposed any of these polices then you would be terminated or sued and in some cases both.
I attempted to the best of my ability to communicate to the IBOAI board the principles of free enterprise being violated by the Amway Corporation. 40% of the Board understood the violations of free enterprise and liberty and made a stand. In my opinion, the other 60% of the Board understood clearly what the issues were. But they pragmatically chose to keep their special positions - even if everyone on their team suffered, they would still make money by being diamonds or above. This is not an acceptable position for true leaders who are called to serve their teams.
Let me give you real life examples of how Amway distributors, in my opinion, do not actually own their own business. You read the true examples and decide for yourself. I could not morally continue to represent a business that had started practicing more Fascist principles than Free Enterprise principles. Amway Corporate will argue that distributors do “own” their business, but read this paragraph on Fascist vs. Socialism.
It is true that fascist systems permitted property ownership, while socialist ones did not. However, fascist "property rights" were only nominal: A businessman (such as Oskar Schindler) would retain legal title to his goods, but he would not retain any control over them. Because he was not politically free, the government could order him to use his property as it desired (such as by using it to produce war implements) - even if it was his property that was being used. Just as there can be no split between mind and body, there can be no split between political freedom and economic freedom. Man cannot exist without a mind and a body, and he cannot be free if someone else controls either.
This states clearly that if you do not have true economic freedom then you are not truly free politically. I personally believe that you are freer before you sign up into Amway. After you have joined Amway, you are subjected to a six month non-compete that you are not even aware of! This is only the beginning - you are also subjected to a 2 year non-solicitation, mandatory arbitration, control over your free speech, etc. I (and others) confronted Amway/Quixtar with all of these and more and was ‘rewarded’ with termination and litigation.
Let’s review the four principles of private property and see how being an Amway distributor stacks up. Do Amway distributors truly ‘own’ their own business? You decide after hearing these true life examples.
1. Control of the use of the property – As a Quixtar business owner, I allegedly ‘owned’ my own Quixtar business. You can imagine the distributors surprise when we found out that we would all be Amway distributors without our permission or approval. How do we have control over our business if we do not even control having a choice of whether to be involved with Amway? Amway changed the bonuses, the rules, and the name without our permission or consent. As a qualified EDC and three year IBOAI board member, I realized that I had no control over the business I allegedly ‘owned’.
2. The right to any benefit from the property (examples: mining rights and rent) – The best example (of many) that I can give is the John Delin story. John wanted to remain a Amway/Quixtar distributor, but without the new contractual principles that Amway had added to the contract. If John owned the business, then certainly he should have a right to reject the new (fascist?) contractual principles added to the contract. Here is actual exchange that is documented in a recent lawsuit filed against Amway/Quixtar.
13. Quixtar’s abuse of its superior bargaining power (in fact, its refusal to bargain at all) is not conjectural. It has happened. Repeatedly. For example, on January 23, 2008, a Quixtar distributor named John Delin sent a letter to Quixtar’s Director of Global Rules and Regulations. In that letter, Mr. Delin and his wife, Diana Delin, sought to renew their distributorship without accepting some of the conditions Quixtar had placed on renewal. They wrote:
We do not agree to Rule 6.5 and the non-compete claimed by Quixtar. There is no non-compete clause in any agreement, which we have ever agreed to with Quixtar. Any statements, written or otherwise, are not agreed to.
Intellectual Property. Since when, and we both know it was when our IBO lists went online, has the organization of people that we, being my wife & I, built now become yours? I didn’t see anyone in the car with us, nor at any of themeetings, nor putting any of your dollars into, nor building any relationships with any of these people, nor anyone at any time contacting them, or helping them “build a business.” You were and always have been the SUPPLIER. . . The LOS [Line of Sponsorship, i.e. the list of recruited IBOs] and the list of names and identities of the people in our personal group are the confidential that belong to us, not Quixtar. We do not accept the conversion of our property to Quixtar’s name.
Pricing. We have poured a sizeable investment into our business, mostly due to loyalty. We understand this. . . . However, we do know and so do you, that al lot of the product pricing is not fair. There has to be changes. We do not agree with the manner in which Quixtar has priced the products that Quixtar sells to its IBOs. Because of the high price of the products, the products cannot be sold at retail or to retail customers. Therefore, IBOs are forced to buy products for internal consumption purposes only in order to meet their performance goals.
Name Change. You have got to be kidding me!!! . . . . We agreed to build a Quixtar business. We did not agree to build an Amway business. Any change in the name will adversely affect the business and our profits.
Five days later, Quixtar responded by terminating the Delins’ distributorship.
Dear John and Diana:
We have received and acknowledge your letter dated January 23, 2007 regarding your formal protest of the renewal of IB#1229237. You state that you do not and will not agree to several of the Rules that comprise the IBO contract with Quixtar. You propose to renew your IB subject to exemption of several of these rules, as set forth in your letter. Quixtar does not accept your proposal, and, accordingly, your business is not renewed.
We would also like to remind you that although your contract with Quixtar is terminated, you are still bound by certain provisions therein, including but not limited to the provisions of Rule 6.5.
14. This is a perfect illustration of Quixtar’s abusive attitude toward contracts, the law, and its distributors.
In my opinion, this is an abusive display of raw power. To take away a person’s distributorship because he has a disagreement with newly added provisions to a contract? You take away a person’s business after decades of faithful service and being taught that he ‘owned’ something? Not only was John fired, but he can’t do anything else for six month in his chosen profession!! This is so unfair that I cannot remain silent any longer!
3. A right to transfer or sell the property – There are many examples here to choose from, but the main point is the right to sell your ownership in the business that you built. Amway/Quixtar repeatedly refused, delayed or terminated people that were attempting to sell their ‘ownership’ asset. If someone owns something, then how can Amway/Quixtar refuse the right to sell it? Jerry Harteis recently sent me an email outlining the disappointing behavior of Amway corporate. Joe Harteis (Jerry's brother) desired to sell his business to his mother and eventually join MonaVie after sitting out the six month per the contract. Joe had a good sized business that would have produced income for his mom. Read the email below to see what happened instead.
My brother Joe was terminated by Amway for asking his people if they would like to buy some MonaVie from his daughter, who is involved with MV. Now Joe was personally sponsored by my 90 yr. Old mother. She has been very active with Amway since they started in 1977. In fact they were recognized as commercial distributors of the year. Therefore there is no question of her competence. She is a widow and as you can imagine depends on the $ from Amway to help her to get along. Also it gives her peace knowing that she has a place to be productive and is rewarded for that effort. When she started back in 1977 she was told that should anyone that they personally sponsored, leave the business, that their business would just move upline. So when Joe was abruptly terminated my mom, Ruth, who raised 14 children, felt that the business that she helped Joe to build would naturally move up to her. Since she had personal relationships with those people it would only make sense to do this. However, after not receiving bonuses on my brother Joe's group, she placed a call to Amway to inquire. She told me that they decided to move that business upline to Brett Deimler, who has taken over the organization. When she asked why this was being done, she told me they replied 'because we have decided to do it that way'. No reasoning, no recourse, no explanation, just we've decided. Now those 30 years she spent being loyal and doing millions of dollars worth of business are wiped away by simply saying 'we just decided to'. I am still pursuing this issue for her so we may be able to resolve it.
Jerry
No ability to sell, no ability to confront (unless you want to spend millions in arbitration), just blind obedience to the all powerful corporation is expected. What exactly can a 90 year old great grandmother do to protect her ‘ownership’ against a corporate behemoth?
4. A right to exclude others from the property – Amway took part of Ruth Harteis business and gave it to the upline, without her approval or consent. How can Ruth state she owns a business, when a corporation can take away from one and give to another without any agreements? This is classic Fascist behavior that would make Hitler and Mussolini proud, in my opinion. When a nation or corporation can take the ‘ownership’ away from one party and give to another with no reasonable recourse, then we do not have true private property or ownership.
I did not write this article out of malice, but out of concern for a once great business. Doug and Steve have lost their way and tuned the business over to corporate bullies. Rich DeVos, please while you still have time – fire the corporate bullies and bring honor, decency, love, and hope back to hurting/fearful distributors across the world. Free Enterprise and serving your customer worked for over 40 years. Please don’t continue the Fascist behavior by terminating and suing your former customers. I have not attacked anyone personally and only ask that you reconsider your current principles and to ask whether they are more Free Enterprise or Fascist in nature. God Bless, Orrin Woodward
"*The following are approximate percentages of Direct Fulfillment IBOs of record in North America who achieved the illustrated levels of success in the calendar year ending August 31, 2005: Diamond .0120%; Emerald .0320%; Q-12 Platinum .1683%."
Less than 1.000% of active IBOs achieve Q-12 Platinum in Quixtar?!?
Let's math this out... According to Quixtar's site as you pointed out above, there were greater than 370,000 IBOs who received a bonus.
This means there were only the following numbers: