Quixtar Non-Compete Rules

Much has been reported about the Quixtar Non-Compete provisions found in the business compendium for the past several months. Certainly, with recent events concerning Joe & Lynn Land, these restrictions are once again at the forefront of discussion. Keeping in mind that Quixtar has always had a form of these rules in place, in early 2004, they apparently opted to extend the scope by adding "teeth" to their provisions.

Though this will make for a long post, I am reprinting the core items that comprise the fabled Quixtar Non-Compete Rules (a.k.a. The Bo Short Rule or The Passport Rules.)

4.14.Other Selling Activities: Except as provided in Rule 6.5., IBOs may engage in other business ventures, including other selling activities, involving products, services, or business opportunities not offered or marketed by the Corporation. However, IBOs may not take advantage of their knowledge of or association with other IBOs whom they did not personally register, including their knowledge resulting from or relating to their individual lines of sponsorship, in order to promote and expand such other business ventures. Such conduct constitutes an unwarranted and unreasonable interference with the business of other IBOs and the Corporation.

4.14.1. Every IBO agrees not to solicit, directly or indirectly, other IBOs whom he or she did not personally register in order to sell, offer to sell, or promote other products, services, or business opportunities not offered or marketed by the Corporation.

4.27. Privacy and Confidentiality: All IBOs are required to abide by the Corporation's Privacy Policy with regard to IBO, Member, and Client information, and its Confidentiality and Non-Disclosure Policy with regard to IBO and IB information.

4.27.1 The Data Management Rule is intended to protect the Line of Sponsorship (LOS) for the benefit of all IBOs, as well as the Corporation. LOS information, i.e., information compiled by the Corporation that discloses or relates to all or part of the specific arrangement of sponsorship within the Quixtar business, including, without limitation, IBO lists, sponsorship trees, and all IBO or IB information generated therefrom, in its present and future forms, constitutes a commercially advantageous, unique, and proprietary trade secret of the Corporation (Proprietary Information), which it keeps proprietary and confidential and treats as a trade secret. The Corporation is the exclusive owner of all Proprietary Information, which is derived, compiled, configured, and maintained through the expenditure of considerable time, effort, and resources by the Corporation and its IBOs. Through this Rule, IBOs are granted a personal, non-exclusive, non-transferable, and revocable right by the Corporation to use Proprietary Information only as necessary to facilitate their Independent Business as contemplated under these Rules of Conduct and as set forth in the Confidentiality and Non-Disclosure Policy. The Corporation reserves the right to deny or revoke this right, upon reasonable notice to the IBO stating the reason(s) for such denial or revocation, whenever, in the reasonable opinion of the Corporation, such is necessary to protect the confidentiality or value of Proprietary Information. All IBOs shall maintain Proprietary Information in strictest confidence, and shall take all reasonable steps and appropriate measures to safeguard Proprietary Information and maintain the confidentiality thereof. An IBO shall not compile, organize, access, create lists of, or otherwise use or disclose Proprietary Information except as authorized by the Corporation. An IBO also shall not disclose Proprietary Information to any third party, or use Proprietary Information in connection with any other businesses or to compete, directly or indirectly, with the business of the Corporation. Use or disclosure of Proprietary Information, other than as authorized by the Corporation, will cause significant and irreparable harm to the Corporation, warranting an award of injunctive relief, including a temporary restraining order and/or a preliminary injunction, specific performance, and damages including costs, attorneys' fees, and disgorgement of all profits made as a result of such unauthorized use or disclosure. An IBO shall promptly return any and all Proprietary Information to the Corporation upon resignation, non-renewal, or termination of his or her IB and shall thereafter refrain from any further use thereof.

6.5. Non-Competition and Anti-Raiding: The Corporation and all registered IBOs share a competitive business interest in maintaining the integrity of the Line of Sponsorship, which was developed exclusively for the purpose of distributing products and services offered or marketed by the Corporation and compensating IBOs for marketing and merchandising such products and services. In order to protect these interests as well as those detailed in Rule 4.27.1., current and former IBOs must not use the Line of Sponsorship to sell, distribute, or promote competing products, services, or other business ventures, or otherwise interfere in the Q* business of other IBOs.

6.5.1 For purposes of this Rule 6.5., "Compete" means to own, manage, operate, consult for, be employed by, or participate as an independent distributor in (a) any other direct sales program using a multilevel or "network" marketing structure, or (b) any other enterprise that markets, through independent distributors, products or services functionally interchangeable with those offered or marketed by the Corporation.

6.5.2. For purposes of this Rule 6.5., "IBO" means an IBO who is either currently registered or has been registered at any time within the past two calendar years.

6.5.3. Every IBO agrees not to Compete, directly or indirectly, with the business of the Corporation while registered as an IBO.

6.5.4. Every IBO agrees not to Compete, directly or indirectly, with the business of the Corporation in the U.S., Canada, and all offshore markets operating under the North American Independent Business Ownership Plan during the six-month period following (a) the voluntary or involuntary resignation, non-renewal, or termination of that IBO's independent business, or (b) any violation by the IBO of this Subsection 6.5.4., whichever is later.

6.5.5. Every IBO agrees not to encourage, solicit, or otherwise attempt to recruit or persuade any other IBO to Compete with the business of the Corporation.

6.5.10. Every IBO acknowledges that violation of any subsection of this Rule 6.5. will cause significant and irreparable harm to active IBOs and the Corporation, warranting an award of injunctive relief, including a temporary restraining order and/or a preliminary injunction, specific performance, and damages including costs, attorneys' fees, and disgorgement of all profits made as a result of such unauthorized activity.

6.5.11. An IBO's obligations under this Rule 6.5. shall survive and remain enforceable following the voluntary or involuntary resignation, non-renewal, or termination of that IBO's independent business.

Reprinted from AmQuix.
Note Item 6.5.2 for anyone who has been involved in Quixtar in the last two calendar years or may be considering it. Free advice – READ THE FINE PRINT. The Quixtar Business Compendium is a 100-page document. Don’t be rushed into signing your application to join. If Quixtar is such a great opportunity, it should be there after you finish reviewing YOUR CONTRACT.