Okmyansky v. Herbalife , 415 F.3d 154 (2005)

Was Herbalife entitled to interpret the distribution contract to only allow future commissions to the Plaintiff?


The Court of Appeals held that Herbalife was entitled to interpret the contract at its sole discretion. Okmyansky was an Herbalife distributor with a significant downline network. He discovered that multiple people in his downline had signed additional sponsorship agreements with another sponsor, a violation of the distribution agreement. Okmyansky wanted Herbalife to pay him back commissions that were wrongfully paid to the pirate sponsor. The company decided, after 4 years, to only pay future commissions to him and not any past commissions. The Court of Appeals upheld the District Court's decision that Herbalife was entitled to decide the dispute in that manner. The distribution contract gave Herbalife the "sole and absolute" discretion to decide issues that arose in a dual distribution situation.

Full case and case summary also available at: http://www.mlmlegal.com/legal-cases/Okmyansky_v_Herbalife.php

LOADING PDF: If there are any problems, click here to download the file.

Written by:

Published In:

Reference Info:Federal, 1st Circuit, Massachusetts | United States

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Babener & Associates | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »


Welcome to MLM Legal - a valuable resource to the Multi-Level Marketing and Direct Sales Industry. ... View Profile »

Follow Babener & Associates:

Reporters on Deadline

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.