LLR, Inc. (“LLR”) recently filed suit against Piphany, LLC (“Piphany”)and several former LLR Independent Fashion Retailers, after initiating an investigation that uncovered misconduct by Piphany and those former LLR Independent Fashion Retailers. Their conduct violated their LLR contracts by soliciting and recruiting other LLR Fashion Retailers to Piphany. This lawsuit is now public record.
Prior to asking the court to issue injunctive relief, the parties agreed to meditate to see if they could come to a resolution. The legal teams from both parties met in Utah where mediation was held. Piphany denied the misconduct reported in the investigation and agreed in writing not to engage in that conduct in future activities as noted below, and found in section 2 of the Memorandum of Understanding, which expressly prohibits Piphany and Stylists from any of the following:
- Pay any current or past LLR independent contractor sales person(”Consultant”) a sum of money to induce them to breach their contractual relationship with LLR and join Piphany as an independent contractor sales person (Stylist”);
- Give any preference to any LLR Consultant who leaves LLR to join Piphany as a Stylist;
- Will not give any LLR Consultant who leaves LLR to join Piphany as a Stylist special rates on product purchases or commissions;
- Will not access, or direct or encourage any employee or Stylist who was an employee or Consultant of LLR to access their LLR genealogy;
- Will not search, or direct or encourage any employee or Stylist who was an employee or Consultant of LLR to search the LLR website for the names of consultants of LLR as prospective Stylists for Piphany;
- Will not attempt to communicate or direct or encourage an employee or Stylist to attempt to communicate with and LLR Consultant at their LLR.com address;
- Will not use any protected intellectual property of LLR; and
- Will not solicit as potential Stylists any LLR Consultants nor direct or encourage any Stylists to do so.
As a result of the mediation, we determined not to pursue injunctive relief pending the results of the mediation. LLR only dismissed Piphany from the lawsuit and not the former lularoe Independent Fashion Retailers named in the lawsuit who are now Piphany Stylists. This resolution represented only a single element of the filed lawsuit. LLR did not release individuals named in the lawsuit.
The individuals named are being pursued via confidential arbitration and cannot be discussed publicly. However, LLR does reserve the right to seek a temporary restraining order and / or preliminary or permanent injunction through the state court, which is why those individuals were named in that state court process.
This is an ongoing investigation and we will vigorously pursue those defendants and any others identified through LLR’s ongoing investigations. Arbitrations are confidential and private according to LLR Policies and Procedures and the only results that can be discussed publicly will be those filed in state court proceedings.
We anticipate the current lawsuit will be stayed pending outcome of the current arbitration proceedings. We also anticipate additional state filings and lawsuits pending those arbitrations.
We remain committed to protecting the brand and holding Retailers that violate their contracts accountable to those terms and conditions and to full extent of the law.
Should any of you find or encounter activities contrary to the agreed upon terms listed above, please contact our Compliance T.E.A.M. notifying them as such.