Agreement to become beauty consultant for mary kay

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Reference no: EM132234910

MARY KAY, INC., A/K/A MARY KAY COSMETICS, INC. v. JANET ISBELL

SUPREME COURT OF ARKANSAS 338 ARK. 556, 999 S.W.2D 669, 1999 ARK. LEXIS 443

In 1980, Janet Isbell signed an agreement to become a beauty consultant for Mary Kay. This agreement established that Isbell would sell products to customers at home demonstration parties, but she was prohibited from selling in retail establishments. In September 1981, Isbell signed her first agreement to become a unit sales director. She signed her second agreement in July 1991. In addition to serving as a beauty consultant, Isbell recruited other beauty consultants. She earned compensation in the form of commission on her sales as well as on the sales of the consultants she recruited. In 1994, she rented a space in a shopping mall to serve as a training center. In April 1994, Mary Kay’s legal coordinator contacted Isbell, stating that the store space was not to be used to sell Mary Kay products. According to the agreement, Isbell’s office could not look like a Mary Kay store. Furthermore, Isbell was told to cease all photo sessions of potential customers and to stop advertising “glamour tips.”

In September 1995, the vice president of sales development notified Isbell that Mary Kay was terminating its agreements with her. Isbell filed suit against Mary Kay, claiming she was a franchise under Arkansas’ Franchise Practices Act. She argued that Mary Kay violated the Franchise Practices Act by refusing to comply with the FPA provisions for termination of a franchise. In August 1997, the trial court granted summary judgment to Isbell, but it did not explain why Isbell’s relationships with Mary Kay could be considered a franchise. The trial court ruled as a matter of law that Mary Kay’s termination of Isbell had violated the Act, and a jury awarded Isbell $110,583.33.

CRITICAL THINKING Question

Outline the judge’s reasoning in this case. What evidence does he use to support this reasoning?

What missing information would you call for when considering the facts of this case?

Would you interpret the Arkansas Franchise Practices Act and apply it to the facts of the case differently than Judge Glaze does? Why or why not?

Reference no: EM132234910

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