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  "documentTitle": "Herbalife, Ltd. (HLF)",
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  "authorName": "David Klafter",
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  "presentationDate": "2014-11-06 00:00:00",
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  "notes": "This is a page from a formal letter/report by Pamela Jones Harbour.",
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      "text": "These “training” programs are fundamentally deceptive and likely violate a number of consumer protection laws.",
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      "text": "The Department of Labor has developed a six-factor test to distinguish genuine “trainees” who are learning a vocation from “employees” who must be compensated in accordance with wage and hour regulations. Herbalife Nutrition Club “training” programs fail on every factor. There is no real training, the programs are not for the benefit of the trainees, there are no regular employees in the Clubs, the Club operators benefit substantially from the free labor, and trainees are told that they are essentially guaranteed a highly lucrative job if they complete the training. Indeed, in July 2013, Herbalife issued an advisory to its distributors warning that participants in Nutrition Club “training” programs could be seen as unpaid workers, in violation of federal law. We urge you either to revamp these “training” programs from the ground up or to ensure that the “trainees” who work tirelessly in Nutrition Clubs are paid at least the minimum wage.",
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      "text": "and unpaid labor from them as possible, the vast majority of Herbalife Nutrition Clubs offer so-called “training” programs. Using Club 100 as a case study, we revealed that these purported “training” programs require aspiring Nutrition Club operators to (i) provide unpaid labor to established Nutrition Club operators in the form of making shakes and cleaning the premises; (ii) purchase and consume Herbalife products every day; (iii) go to other Nutrition Clubs and pose as customers to help club operators convince prospective recruits that they will have no trouble finding such customers; and (iv) enlist their family and friends to purchase and consume products and also pose as customers. Thus, “trainees” provide substantial benefits both to their upline club operators, who benefit from unpaid labor, mandatory consumption of Herbalife products and the misimpression that the “trainees” are genuine retail customers, as well as to Herbalife, which generates very substantial revenues from the mandatory consumption that is inherent in these so-called “training” programs.",
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      "text": "Notwithstanding Herbalife’s statements to the contrary, there is no real “training” involved: trainees spend most of their time mixing shakes and cleaning toilets. Trainees are also required to attend classes, where they purchase and consume Herbalife products, listen to testimonials of others who claim to be successful in the business, and are presented with deceptive projections of the income they can expect to earn once they are permitted to open their own Nutrition Clubs. These “training” programs often take months or even years to complete, with advancement dependent on subjective judgments made by the Nutrition Club operator as to whether a “trainee” has adequately mastered each skill.",
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      "text": "These “training” programs are fundamentally deceptive and likely violate a number of consumer protection laws. In addition, we believe these “training” programs operate in violation of the Fair Labor Standards Act (“FLSA”) and state law analogues.",
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      "text": "12 Opinion Letter Fair Labor Standards Act (FLSA), FLSA2004-5NA, 2004 WL 5303033 (Cir. Ct. May 17, 2004); see also U.S. Dep’t. of Labor, Fact Sheet #71: Internship Programs Under The Fair Labor Standards Act (Apr. 2010), available at http://www.dol.gov/whd/regs/compliance/whdfs71.pdf.",
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      "text": "13 http://www.herbalifepyramidscheme.com/media/2014/07/Nutrition_Club_Presentation_The_Big_Lie_7.22.14.pdf (Slides 156-57).",
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