Bona Law Files Breach of Contract Lawsuit Against USANA Health Services
Bona Law attorneys Jarod Bona and Aaron Gott filed a lawsuit on August 15, 2017 against multilevel marketing company USANA Health Services (NYSE:USNA) on behalf of one of USANA’s most successful distributorships that it terminated for pretextual reasons.
The complaint alleges that Elizabeth Strand and her company, Amara Enterprises, had been a USANA distributorship since 1995 until it was terminated in 2011. Strand’s husband, Dr. Ray Strand, had an unrelated, nonexclusive contract to consult with and speak about nutrition and supplements on behalf of USANA. Dr. Strand, who is a renowned expert in nutritional medicine, had often consulted with and spoke for USANA and other nutrition companies—including USANA’s direct competitors for years. But when Dr. Strand informed USANA that he would be working with Ariix—a company that was formed by former USANA officers who had left USANA—USANA sought to prevent him from doing so by threatening to terminate Amara’s unrelated contract with USANA. That is, USANA sought to punish Elizabeth Strand’s company out of retaliation for her husband’s independent career choices.
USANA asserted that Amara had breached a provision of the USANA terms and conditions that prohibit distributors from attempting to recruit other USANA associates to work for USANA competitors. The complaint alleges that USANA’s interpretation of the provision is indefensible—as Dr. Strand is an independent nutrition expert and does not “recruit” anyone to work for any company—but in any case, USANA waived it by failing to enforce it on the numerous occasions over the course of its 16-year relationship with Elizabeth Strand and Amara.
The complaint, which was filed in the U.S. District Court for the District of Utah, asserts claims for breach of contract, breach of good faith and fair dealing, and unjust enrichment. USANA’s deadline to respond to the complaint is September 7.