QUIXTAR: The Truth About the Morrison Decision

Original Source

The Truth About the Morrison Decision
February 09, 2008

There are already false rumors online about an appeals court decision in the Morrison v. Amway Corp. case. The decision, which is not yet final, and could be changed in future court proceedings, does not apply to current arbitration rules, which can't be changed except by mutual agreement of Quixtar and the IBOAI, and it also doesn't apply to disputes that arose after arbitration became part of the IBO contract in 1998. This ruling therefore should not affect any current case (the Morrison case was more than ten years old).

The ruling issued on February 6 by the Fifth Circuit Court of Appeals in Morrison v. Amway Corp. specifically states only that it applies "to the claims asserted in the instant suit." The Court's discussion of the claims in Morrison and the arbitration agreement as it existed in 1998 show that the ruling does not apply to the Quixtar-IBOAI arbitration rules as they currently exist, and also does not apply to disputes that arose after the arbitration agreement became part of the IBO contract in 1998.

First, the court (describing the 1998 version of the arbitration rules) stated that "[t]here is no express exemption of the arbitration provisions from Amway's ability to unilaterally modify all rules . . . ." This is certainly not true of the Quixtar-IBOAI arbitration rules as they exist today and have existed for many years. Rule 11.5.1 of the Rules of Conduct specifically provides:

"These Rules shall be amended only by mutual agreement
between the Corporation [Quixtar] and the IBOA International
Board."

This language is clear and unequivocal - Quixtar cannot change the Quixtar-IBOAI arbitration agreement without the agreement of the IBOAI Board. Whatever the court believed about Amway's ability to modify the 1998 rules is not true of the present day rules.

Second, the court stressed that the disputes between the Morrison plaintiffs and Amway arose before the arbitration agreement became part of the Amway contract effective January 1, 1998. This reasoning would not apply to any IBO whose dispute arose after 1998.

Posted at 03:06 PM