Some companies state that you can’t recruit people that you didn’t personally sponsor. If you personally sponsor a friend or family member then why can’t you recruit them to join you at your new company?
The short answer is that company policies have evolved over the years resulting from a combination of increased raiding by distributors who switch companies, on the one hand, and secondly, direct selling companies have become more rigid in trying to retain their sales force, sometimes with good reason, and sometimes appearing to be an “overreach.”
Leading direct selling companies, for instance, around 20 years ago, maintained a policy that required consultants to only offer the opportunity to people that they personally sponsored. That policy was common 20 years ago.
Over time that policy changed. With the increased ease of communication due to technology, many companies asked that consultants not participate in raiding anyone in their organization while they were active with a company. The policy morphed again to require consultants not to sponsor anyone in a new opportunity except for those that they personally sponsored upon leaving for a new company. Then the policy changed again to where companies required that consultants who left a company not sponsor anyone into the new company. In a few instances, some companies have provided non-compete agreements, which aren’t considered fair and not even enforceable as a matter of policy in the state of California. Some companies have gone so far as to tell their distributors that they cannot participate in any direct selling activity for a certain period of time after leaving the company. Almost all states frown on non-compete agreements because they inhibit people from conducting their livelihood. Compared with the policies of twenty years ago, the extremities in policy have morphed extensively in terms of restrictions.
Today, the most common clauses seen are ones in which companies have moved from the concept of ‘don’t recruit anyone unless you’ve personally sponsored them’ to ‘during your time with our company, we ask that you not raid anyone in your sales organization, whether you’ve personally sponsored them or not.’ Most companies today will also ask that former consultants not raid people in their organization and recruit them to another for a period of six months to one year.
Most companies will allow consultants to join downlines with multiple companies so long as they don’t raid the sales organization. In the party plan arena, companies will often implement restrictions based on product. If you are selling jewelry, for instance, then the company will ask that you not join another company selling jewelry.
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