Terry Dorfman versus Melaleuca lawsuit Max International and Ken Dunn, Melaleuca official response

Melaleuca apologizes to Ted Nuyten, and send an official response on the Terry Dorfman lawsuit post, and many comments.

On December 16 th, 2010 we reported over the Terry Dorfman versus Melaleuca lawsuit, followed by a letter from Melaleuca legal department (You find the post here) demanding to take the business for home.org website down.

Terry Dorfman


Frank Vandersloot


Ken Dunn
Terry Dorfman Frank Vandersloot – Melaleuca Ken Dunn – Max Intern

I received the following email and letter on January 10 th, 2011 :

Mr. Nuyten:

I wanted to follow up and apologize again for the tone of the letter that our Legal Assistant sent to you over the Christmas holiday.  As it was explained, that was a form letter that Melaleuca sends out to numerous websites that infringe our copyright, and was not meant to target your entire website.  While Melaleuca does defend against copyright infringement, we appreciate very much how you have handled the copyright issue and your quick attention to correcting the problem.

We have noticed a substantial number of comments to your posting about the lawsuit Terry Dorfman has filed against Melaleuca.  Many of those postings, in our view, are based upon incorrect information about the case.  While we intend to defend the case in court, we cannot simply ignore all of the false information being disseminated about the case.  As a result, we are forwarding the attached letter addressing your post regarding the Dorfman lawsuit and the comments from others.  We request that you provide a link to this letter at the top of the page located at https://www.businessforhome.org/2010/12/terry-dorfman-versus-melaleuca-lawsuit-max-international-and-ken-dunn/, so that other readers may have the opportunity to read Melaleuca’s response.  Thanks for your time and for your interest in allowing the public to hear all sides of the story

<Michael LaClare – Associate General Counsel – Melaleuca, Inc.

Melaleuca official response

January 10,2011

Dear Mr. Nuyten:

We are writing to provide a few facts that shed light on the meritless nature of Ms. Dorfman's- lawsuit. It is not unusual for plaintiffs to make unsubstantiated statements in a legal complaint against a company. In some cases, a plaintiff may lodge statements for publicity and to leverage what they perceive to be a better bargaining position in the litigation. In Ms. Dorfman's case, she has included many allegations in her complaint that are inaccurate. Other statements upon which she relies are simply untrue. Some of those statements are the very statements highlighted by you on your web posting entitled Terry Dorfman versus Melaleuca Lawsuit, Max International and Ken Dunn.

What the Evidence Will Ultimately Show

Once all the relevant evidence is brought forward in the lawsuit, it will be clear that Ms. Dorfman freely admitted that she personally participated in helping a Max distributor solicit and attempt to enroll other Melaleuca Marketing Executives. This is in direct violation of Melaleuca's written policy and grounds for termination, which the policy makes very clear. Ms. Dorfman did this while she was a Melalecua Marketing Executive. She also acknowledged willfully violating other policies. And her personal admissions were substantiated by multiple other sources.

In October 2009, Melaleuca gave Ms. Dorfman and other Marketing Executives the opportunity to receive amnesty for any prior violations of their non-solicitation obligations so long as they disclosed any such violations in full on an amnesty card that was provided. As Ms. Dorfman acknowledged in her complaint at paragraphs 50-52, she voluntarily completed the amnesty card.

It is not true, however, that Melaleuca used any information that Ms. Dorfman disclosed on her amnesty card as a basis for her termination. Instead, additional information later came to light that made clear that Ms. Dorfman had failed to disclose substantial prior violations of her nonsolicitation agreement. She omitted material facts about her involvement with and knowledge of the illegal raiding activities of Max International and its Associates (which resulted in the entry of a preliminary injunction against Max).

Moreover, many of Ms. Dorfman's other complaint allegations contain exaggerated and provocative descriptions of statements that paint a very inaccurate picture substantially different from what Mr. VanderSloot actually did and said.

Transcript Showing What Mr. VanderSloot Actually Said

In her lawsuit, Terry Dorfman refers to statements made by Frank VanderSloot on August 12, 2010, to a group of Melaleuca business leaders. She says that several of Mr. VanderSloot's statements were untruthful and defamatory. Below is an exact transcript of all statements by Mr. VanderSloot regarding Ms. Dorfman at the August 2010 meeting. This transcript was filed with the Utah federal district court:

[Frank VanderSloot]: There was a fifth Marketing … er a fifth Executive Director, actually Executive Director VI, whose marketing agreement with Melaleuca was terminated just this last week. And I'm sad to announce that. But it was Executive Director VI, Terry Dorfman. President's Club winner last year. A candidate for President's Club this year. Really close contender! She'd been offered the amnesty agreement. She'd filled out an amnesty agreement. Said a few things. Didn't tell us the whole story! Turns out, she was part of this whole Max International thing from the beginning. She decided not to go with them. But she had friends who had. And she didn't tell us that, Folks, that this was going on! She could have raised her hand and come forward and we could have-and all these people's lives would be much better. She helped arrange travel for Max to bring in Melaleuca Marketing Executives to meet with Max Executives. Why she did this (she said it was to help out her sister who wasn't doing-who had signed up with Max.) But you can't do that! You can't help somebody
else recruit Melaleuca people, even if you haven't decided to sign up yourself. There was a whole bunch-a whole bunch more to this story. Agonizing decision! But her agreement with Melaleuca has now been terminated. She was making over $300,000 a year. It baffles me why someone would mess around with that kind of stuff. And we want you-we want-I'm telling you about this because, I don't want to do this anymore. I'm just going to plead with you. Don't put us in this situation! Do you understand? We cannot have any tolerance for this, whatsoever.

Poor Terry Dorfman owes Melaleuca $600,000. Because in the Policy it says you resign at the time-it's your resignation at the time you violate. Any money you're paid past the violation, you have to pay back. It's really, really clear. We anticipate the courts will enforce that. And we're going to give whatever we collect from that back to the Marketing Executives who were damaged from this whole endeavor.

Melaleuca will protect your business from being raided, cut and dry. Now, I spent way too much time on that, but I don't want to terminate anybody else, ok? So, now, let's talk about something else that's fun to talk about.

By comparing the actual transcript to the complaint allegations, you can see that Ms. Dorfman includes numerous allegations that are simply not accurate. For instance, in paragraph 84 of the complaint, with reference to the August 12 Leadership Session, Ms. Dorfman alleges as follows:

Vandersloot provided the attendees with details about Ms. Dorfman's alleged contract violations by announcing … that Ms. Dorfman was responsible for [her sister] Barb Dorfman becoming a distributor at Max. A review of the transcript reveals that Mr. VanderSloot never made any such statement. In fact, a careful reader will note several serious discrepancies between what Ms. Dorfman claims and what Mr. VanderSloot really said.

We suggest that those interested compare what Mr. VanderSloot actually said with what Ms. Dorfman claims he said in her lawsuit. One could then make reasonable assumptions as to the accuracy or truthfulness of the rest of Ms. Dorfman's claims.

Lawsuits are never enjoyable. But there is at least one huge positive result. The truth comes out in the end. We encourage you to wait until you hear all of the facts before forming opinions on the fairness of both Melaleuca's policies and its enforcement of those policies. As the facts surrounding this case are revealed, you will also be able to understand why Melaleuca's handling of Ms. Dorfman's situation was very fair, indeed.

Melaeluca's Stellar Track Record

Melaleuca grew by over $81 million in 2010 alone-that represents a 9.9% increase in sales over the previous year. The reason Melaleuca seems to be growing faster than almost any other direct selling company is not only because of its great products, but also because its Marketing Executives trust the company and know that the company will treat them fairly and protect them from being raided by unscrupulous persons or companies. Melaleuca has been in business for 25 years and continues to have a wonderful and unblemished reputation. It has been my experience that only its competitors and those who are no longer qualified to be members ever try to damage Melaleuca's reputation. Melaleuca will, of course, vigilantly defend its great reputation and proud history with the truth. And, as Mr. VanderSloot has always said, the truth is good enough.

Melaleuca's CEO, Frank VanderSloot, has been leading Melaleuca on a very successful journey for the past 25 years. That success speaks volumes about Mr. VanderSloot's character and dedication to fairness and his entire mission of enhancing the lives of others. Hundreds of thousands of Marketing Executives have joined Mr. VanderSloot in fulfilling the company's mission of enhancing lives. Both Mr. VanderSloot and Melaleuca have been given countless awards over the years by various organizations, including the Better Business Bureau, the U.S. Chamber of Commerce, various civic organizations, universities, USA Today, NASDAQ, Ernst
& Young and others, for the company's ethics, friendly business environment and business methods. Anyone interested in investigating those awards should visit the website www.melaleucaawards.com.

Michael LaClare Associate General Counsel


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