Preview
FILED
DALLAS COUNTY
6/28/2019 3:33 PM
FELICIA PITRE
DISTRICT CLERK
Veronica Vaughn
CAUSE NO. DC-18-05560
MARY KAY INC., § IN THE DISTRICT COURT OF
§
Plaintiff, §
§
v. § 116th JUDICIAL DISTRICT
§
xxxxx xxxxx xxxxxxx, §
§
Defendant. § DALLAS COUNTY, TEXAS
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
DATE: June 28, 2019 /s/ Christopher J. Schwegmann
Christopher J. Schwegmann
Texas Bar No. 25051315
cschwegmann@lynnllp.com
Jared D. Eisenberg
Texas Bar No. 24092382
jeisenberg@lynnllp.com
LYNN PINKER COX & HURST, LLP
2100 Ross Avenue, Suite 2700
Dallas, Texas 75201
Telephone: 214-981-3800
Facsimile: 214-981-3839
Jill Herz
Texas Bar No. 00785930
service@jillherz.com
ATTORNEY AT LAW
430 Founders Square
900 Jackson Street
Dallas, Texas 75202
(214) 745-4567 – (Telephone)
(214) 745-1156 – (Facsimile)
ATTORNEYS FOR PLAINTIFF
MARY KAY INC.
TABLE OF CONTENTS
TABLE OF CONTENTS ................................................................................................................. i
I. INTRODUCTION .............................................................................................................. 1
II. FACTUAL BACKGROUND ............................................................................................. 4
A. MARY KAY INC. ...................................................................................................... 4
B. THE NSD AGREEMENT ............................................................................................ 5
C. THE FSP AGREEMENT ............................................................................................. 6
D. THE NSD AMENDMENT ........................................................................................... 6
E. xxxxxxx BREACHES THE NSD AND FSP AGREEMENTS ............................................ 8
1. The “Health and Wellness” Promotions. .................................................... 9
2. The “CEO Series” Solicitation.................................................................. 15
3. Improper Use of “Contact Information” Acquired While at Mary Kay. .. 18
F. PROCEDURAL SUMMARY ....................................................................................... 19
III. ARGUMENT .................................................................................................................... 20
A. LEGAL STANDARD ................................................................................................. 20
B. THE COURT SHOULD GRANT SUMMARY JUDGMENT ON MARY KAY’S CLAIMS FOR
BREACH OF CONTRACT .......................................................................................... 20
1. There is No Dispute of Fact Regarding the Elements of the Claim.......... 21
2. There is No Dispute of Fact that these Breaches Are Material................. 22
3. There is No Dispute of Fact that these Breaches Caused Harm. .............. 24
C. THE COURT SHOULD GRANT SUMMARY JUDGMENT ON ALL OF xxxxxxx’S CLAIM
BECAUSE OF THE COVENANT NOT TO SUE AND RELEASE AGREEMENT BARS ALL
CLAIMS RELATING TO OR ARISING OUT OF THE BUSINESS RELATIONSHIP BETWEEN
THE PARTIES .......................................................................................................... 24
D. THE COURT SHOULD GRANT SUMMARY JUDGMENT ON xxxxxxx’S CLAIM FOR
BREACH OF CONTRACT .......................................................................................... 26
E. THE COURT SHOULD GRANT SUMMARY JUDGMENT ON xxxxxxx’S CLAIM FOR
BREACH OF FIDUCIARY DUTY................................................................................ 27
F. THE COURT SHOULD GRANT SUMMARY JUDGMENT ON xxxxxxx’S CLAIMS FOR
RELIGIOUS DISCRIMINATION AND RETALIATION UNDER THE FCRA ..................... 29
G. THE COURT SHOULD GRANT A NO-EVIDENCE MOTION FOR SUMMARY JUDGMENT
ON xxxxxxx’S CLAIM FOR RELIGIOUS DISCRIMINATION ........................................ 33
H. THE COURT SHOULD GRANT A NO-EVIDENCE MOTION FOR SUMMARY JUDGMENT
ON xxxxxxx’S CLAIM FOR RETALIATION ................................................................ 34
IV. CONCLUSION ................................................................................................................. 35
i
Plaintiff Mary Kay Inc. (“Plaintiff” or “Mary Kay”) files this Motion for Summary
Judgment (“Motion”), and in support thereof, respectfully shows the Court as follows:
I. INTRODUCTION
In the fall of 2017, Mary Kay decided to exercise its right to terminate the contracts of
former Independent National Sales Director xxxxx xxxxx xxxxxxx, a decision that would have ended
xxxxxxx’s right to certain monthly payments made to her under a deferred compensation award
program. Mary Kay agreed, however, not to terminate those contracts in exchange for, among
other things, xxxxxxx’s agreement: (1) not to solicit the Mary Kay’s sales force to purchase products
and services not offered by Mary Kay; (2) to “delete or destroy” all personal contact information
about Mary Kay’s sales force that she received during her tenure as a National Sales Director, and
importantly, (3) not to sue – and thereby release – Mary Kay from all claims, whether known or
unknown, “relating to or arising out” of her business relationship with Mary Kay. Before the ink
was even dry, xxxxxxx began a targeted email campaign to promote non-Mary Kay products to
Mary Kay’s sales force using the very same confidential contact information that she promised to
delete or destroy. As a result, Mary Kay sued xxxxxxx to stop her repeated solicitation of the
Mary Kay sales force.
The Court should grant summary judgment on Mary Kay’s claim for breach of contract.
xxxxxxx agreed that she would not: (i) promote, distribute or sell to other members of the Mary Kay
sales organization any products or services which are not produced, sold, or endorsed by
Mary Kay; (ii) solicit, directly or indirectly, members of the Mary Kay sales organization to sell
products or services other than those sold by Mary Kay; and (iii) use, or knowingly permit any
other person to use, any names, mailing lists or other information which she obtained during her
association with Mary Kay for the promotion or the sale of any other company’s products or
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 1
services. xxxxxxx acknowledged and agreed that these were material terms and that any breach of
these obligations would result in the forfeiture of the monthly payments described above. As is
conclusively shown below, xxxxxxx sent a number of email blasts – more than 6,600 emails in total
– to members of the Mary Kay sales organization, encouraging them to purchase products and
services not offered by Mary Kay. None of those facts is disputed. Accordingly, this Court should
grant summary judgment on Mary Kay’s claim for breach of contract.
Having no other defense for her conduct, xxxxxxx instead chose to go on the offensive. On
June 6, 2018, xxxxxxx sued Mary Kay for breach of contract, alleging Mary Kay wrongfully
terminated her monthly payments, despite her promise not to sue and her own failure to abide the
terms of her agreements with Mary Kay. In August 2018, xxxxxxx filed a charge of discrimination
with the EEOC in Tampa, Florida, suggesting that Mary Kay – a company founded on Christian
principles – discriminated against xxxxxxx because she is a Christian. On February 22, 2019, after
the EEOC dismissed her charge of discrimination with an explicit finding of “no
employer/employee relationship,” xxxxxxx asserted additional counterclaims for breach of
fiduciary duty, religious discrimination, and unlawful retaliation.
Mary Kay did not discriminate against xxxxxxx – or anyone else – on the basis of religion.
And as explained below, xxxxxxx cannot succeed on any of these counterclaims as a matter a law.
Mary Kay respectfully asks this Court to grant summary judgment on xxxxxxx’s counterclaims for
breach of contract, breach of fiduciary duty, unlawful religious discrimination, and for retaliation
under the FLORIDA CIVIL RIGHTS ACT (“FCRA”) for the following reasons:
First, xxxxxxx entered into an express release agreement and covenant not to sue which
expressly bars these counterclaims. 1 xxxxxxx agreed, as an “inducement to forgo immediate
1
See Ex. A-2 (NSD Amendment) at § 7.
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 2
termination and permit [her] the opportunity to participate in the Family Security Program,” that
she would not bring any action or any claim “relating to or arising out of” her agreements with
Mary Kay or her business relationship with the company, thereby “releasing Mary Kay from any
alleged claims and rights of xxxxxxx, known or unknown.” xxxxxxx’s counterclaims all fall squarely
within the scope of the release and covenant not to sue. The Court should grant summary judgment
on all of xxxxxxx’s claims for this reason alone.
Second, xxxxxxx expressly disclaimed the existence of a fiduciary relationship between
herself and Mary Kay when she executed the Family Security Program Agreement (the “FSP
Agreement”). 2 The FSP Agreement, which xxxxxxx herself seeks to enforce, states: “Nothing
contained in the [FSP Agreement], and no action taken pursuant to its provisions, shall create or
be construed to create a trust or a fiduciary relationship of any kind between the Company and
[xxxxxxx].” The plain language of the FSP Agreement bars a claim for breach of fiduciary duty on
its face. And because xxxxxxx has no evidence to prove the existence of any other fiduciary duty,
the Court should grant summary judgment on this claim.
Third, xxxxxxx’s claim for unlawful religious discrimination and retaliation fails as a matter
of law because she was not a Mary Kay employee, a classification that xxxxxxx has renounced
multiple times in her contracts with Mary Kay, in the books she authored, and even in her own
sworn testimony in this case. Her repudiation has been so consistent and compelling that even the
EEOC was convinced that her relationship with Mary Kay fell outside the employer/employee
relationship. 3 xxxxxxx was an independent contractor, and as such, she cannot pursue relief for
religious discrimination under the FCRA as a matter of law.
2
See Ex. A-3 (FSP Agreement) at § 7.1.
3
Ex. B-11.
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 3
Finally, and in the alternative, Mary Kay asks this Court to grant a no-evidence motion for
summary judgment on xxxxxxx’s claims for breach of fiduciary duty, religious discrimination, and
unlawful retaliation. xxxxxxx has had more than sufficient time for discovery. She has no evidence
of a fiduciary duty. She has no evidence that she was a Mary Kay employee; nor does she have
any evidence to support any of the elements of those claims. Accordingly, the Court should grant
summary judgment on those counterclaims.
II. FACTUAL BACKGROUND
A. MARY KAY INC.
Mary Kay is a manufacturer and wholesale distributor of cosmetics, toiletries, skin care,
and related products. Mary Kay does not sell products directly to the consumer. Instead, Mary Kay
sells its products at wholesale prices and on a pre-paid basis, to self-employed Independent Beauty
Consultants (“IBCs”). The IBCs then offer the products directly to their customers at retail prices,
through personal contacts—such as at-home parties. Mary Kay offers IBCs information, such as
product knowledge that they can, in turn, share with their customers to provide the highest level
of customer service and product satisfaction.
Mary Kay offers certain IBCs who demonstrate exceptional abilities in aiding, counseling,
and inspiring other IBCs—and IBCs and who distinguish themselves through success—to become
Independent National Sales Directors (“NSDs”). The NSD program offers participants the
opportunity to earn increased special incentive compensation, the opportunity to participate in
certain advertising and other programs using Mary Kay’s trademarks as authorized by Mary Kay,
and other valuable rights, privileges, and benefits.
In addition, as part of her participation in the program, an NSD receives valuable
information covering cosmetic arts, leadership, business management, motivation, and selling
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 4
techniques through personal participation in conferences, business meetings, and seminars, and
through other Mary Kay sponsored programs and events. Significantly, and as part of her
participation in the NSD program, an NSD receives personal access to Mary Kay reports and other
confidential information, including comprehensive lists of names, addresses, telephone numbers,
and detailed records of other Mary Kay IBCs’ and NSDs’ sales information.
B. THE NSD AGREEMENT
xxxxxxx executed an Independent National Sales Director Agreement (“NSD Agreement”)
on December 1, 2002. 4 Among other rights and benefits, Mary Kay gave xxxxxxx access to personal
information and data for thousands of Mary Kay IBCs, including their email and home addresses,
phone numbers, production, order, and other confidential information. This information was
available to xxxxxxx through a Mary Kay website called InTouch. Every time xxxxxxx logged into
InTouch, she had access to this information. 5 In exchange for this information, as well as other
rights and benefits provided by Mary Kay, xxxxxxx agreed not to:
• Promote, distribute, or sell to other members of the Mary Kay sales organization
any products or services which are not produced, sold, or endorsed by Mary Kay; 6
• Solicit or recruit, directly or indirectly, Mary Kay’s independent sales force to sell
products or services other than those sold by Mary Kay; 7
• Use, or knowingly permit any other person to use, any names, mailing lists, or other
non-public information that she obtained during her association with Mary Kay to
recruit or promote the sale of any other company’s products in the United States. 8
In addition to those agreements, xxxxxxx agreed to “delete or destroy all personal
information that [she] received directly or indirectly from the Company regarding other
4
Ex. A-1.
5
Ex. B-1 at 91:14-25, 248:8-10.
6
Ex. A-1, §§ 8.6, 8.10.
7
Ex. A-1, § 8.10
8
Id.
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 5
Independent Beauty Consultants, Independent Sales Directors, and National Sales Directors in
[her] possession” upon the termination of her agreements with the Company for any reason. 9
xxxxxxx acknowledges that when she signed her NSD Agreement she knew that she was prohibited
from using, at will, any names and mailing lists she obtained during her time as ISD and NSD. 10
C. THE FSP AGREEMENT
xxxxxxx also chose to participate in the Family Security Program (“FSP”), an award
program offered to NSDs under the NSD program. The FSP offered her monthly payments and
other valuable consideration upon the retiring of her Mary Kay business. In consideration for
certain monthly payments of $11,042.93 over a 15-year period (the “FSP Payments”), and other
valuable consideration provided by Mary Kay under the FSP Agreement, xxxxxxx agreed not to:
• “[P]romote, distribute, or sell to other members of the Mary Kay sales organization
in the United States of America, without the Company’s prior written approval, any
products or services which are not produced, sold, or endorsed in writing by the
11
Company.”
• “[E]ngage, directly or indirectly in recruiting Mary Kay Beauty Consultants, Sales
Directors, or National Sales Directors in the United States of America to sell
12
products or services other than those sold by Company . . . .”
• “[U]tilize or knowingly permit any other person to utilize, any names, mailing lists
or other information which [she] has obtained during [her] association with the
Company for recruiting or for promotion of the sale of any other company’s
products or services.” 13
D. THE NSD AMENDMENT
By the fall of 2017, Mary Kay chose to terminate its relationship with xxxxxxx. On October
18, 2017, xxxxxxx executed an amendment to the NSD Agreement (the “NSD Amendment”). 14
9
Ex. A-4, § 8.11.
10
Ex. B-1 at 93:23-94:5.
11
Ex. A-3, § 10.2.
12
Id.
13
Id.
14
Ex. A-2.
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 6
xxxxxxx retained an attorney to negotiate the NSD Amendment. 15 The NSD Amendment facilitated
xxxxxxx’s withdrawal from the Mary Kay sales force, but allowed her to participate in the Family
Security Program subject to certain conditions. Specifically, xxxxxxx agreed that:
• “[A]ny contact, communication or interaction with IBCs, ISDs, or NSDs shall be
in compliance with . . . sections . . . 8.10 of the [NSD] Agreement and 10.2 of her
FSP Agreement.” 16
• “No other announcements of any kind whether through mail, email, social media,
text messages, telephone, Voxer, or other physical, electronic, or digital messages
shall be sent by [xxxxxxx] to members of [xxxxxxx’] national area, to Go Give
independent Mary Kay sales force members, or any other member of the Mary Kay
independent sales force to whom [xxxxxxx] was introduced or is connected based
upon her status as a member of the Mary Kay independent sales force.” 17
In the NSD Amendment, xxxxxxx further “acknowledge[d] and reaffirm[ed] her
understanding and agreement” that:
• Section 8.10 of the [NSD] Agreement is a material provision of the [NSD]
Agreement and that any breach of the terms and conditions of Section 8.10 shall
be a material breach of the Agreement;” 18 and
• “her obligations set forth in Section 10.2 of the Family Security Program agreement
are a material provision of the Family Security Program agreement and that any
breach of the terms and conditions of Section 10.2 shall be a material breach of
the Family Security Program agreement.” 19
xxxxxxx agreed that her right to FSP Payments was expressly “dependent and contingent
upon” her “compliance with her obligations under the terms of th[e] Amendment as well as the
continuing obligations set forth in the NSD Agreement and Family Security Program
15
Ex. B-1 at 119:5-17.
16
Ex. A-2, § 3.
17
Id. at § 3(2).
18
Id. at § 5.
19
Id.
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 7
agreement.” 20 Indeed, xxxxxxx expressly agreed that any “breach of these material provisions
[would] result in [her] forfeiting any right to payments under the Family Security Program.” 21
Finally, in executing the NSD Amendment, xxxxxxx entered into a covenant not to sue and
explicitly released the claims she now asserts. Section 7 of the NSD Amendment states:
As an inducement for Mary Kay to forgo immediate termination and permit
[xxxxxxx] the opportunity to participate in the Family Security Program, [xxxxxxx]
covenants and agrees she will not individually or jointly institute, maintain, assert,
cooperate and/or bring any action at law or in equity, or other claim, including a
claim of fraudulent inducement, by complaint, counterclaim or any other method,
against the Company . . . relating to or arising out of this Agreement, this
Amendment, any other agreement between the Company and [xxxxxxx], or the
business relationship between the Company and [xxxxxxx], thereby releasing
Mary Kay from any alleged claims and rights of [xxxxxxx], known or unknown. 22
E. xxxxxxx BREACHES THE NSD AND FSP AGREEMENTS.
xxxxxxx considers herself a public figure and a brand, which she promotes as a business.23
Her business is conducted under a corporate entity named JCV Global. 24 She maintains the
websites JamieVrinios.com and CrazyLikeFoxes.com. 25 She sells books, promotes podcasts, and
sells products from other direct selling companies. 26 xxxxxxx markets her brand by blasting emails
announcing a podcast or something else that she is doing. 27 xxxxxxx employs Jenny Chavez to
“shoot out” these emails. 28 Chavez works for JCV Global, and she handles the website and any
emails that are sent out.29 When xxxxxxx wants to promote an event, she asks Chavez to “shoot
20
Ex. A-2, § 5.
21
Id. (emphasis added).
22
Ex. A-2, § 7.
23
Ex. B-1 at 176:7-9, 177:10-17.
24
Id. at 36:7-11.
25
Id. at 176:10-20.
26
Id. at 177:2-23.
27
Id. at 180:14-19.
28
Id. at 180:14-19.
29
Id. at 48:14-23, 50:4-8.
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 8
out” an email. 30 xxxxxxx always has Chavez send the email blasts because that is what Chavez does
for xxxxxxx. 31
1. The “Health and Wellness” Promotions.
On April 16, 2018 (and the days after), xxxxxxx sent unsolicited mass emails to Mary Kay’s
sales representatives promoting her “health and wellness podcast.” In doing so, she solicited
business for John Monhollon, M.D., of the Florida Integrated Medical Center, and herself.32
Regarding the former, xxxxxxx not only promoted Dr. Monhollon’s medical services but offered to
schedule “consultation” appointments with him, including for a series of B12 shots on which
xxxxxxx promised they would receive a discount: 33
Also., if yolJl nave specific eeds and are ·nterested in a one e>n one phone
consulta ·on ,vitti Dr. I'-. ontto lo . please ema1 amie
at Ja "eCVrillliO§@aa. .CCDm. 1A'e \WI gel ~~OU ()111 his sched le
promptf~f. Referrals from QUE" podcast parlicis;iants and seminar attem:lees ,vi II
receive a d isc ount and a series of B 12 shots. lJVhen mak§ g ye>ur a,Ps;>€'1intment
tatirough a ie; provide the ,c ode 7777 and et them kn•O'i'il ; 1ou area J).articipant
in ttte Health & Well ess podcast ,: · h xxxxxxxxxxxxx and r. Monho en.
In this same solicitation, xxxxxxx also told Mary Kay’s sales force to “check[] the JCV Must
Have Section” of her website to purchase from xxxxxxx the supplements she was discussing on
these podcasts: 34
I Coming soon ! We wi
the s p
keep checlan-g the CV
1be posti g on Jam ie's site a l1nk 10 pu roh ase
lements m en · oned by D1r. Monhollon i
ust Have section o t
this week's podeasl.
e website or delai s.
Be sure to
I
30
Id. at 206:24-207:3.
31
Id. at 242:19-243:5.
32
xxxxxxx did not just send this solicitation on April 16, however. To the contrary, she was relentless in her misconduct.
Mary Kay learned in the days following Vrinos’s first April 16 mass-solicitation that xxxxxxx continued to send this
same email promotion to the Company’s sales representatives for several days thereafter. See, e.g., Ex. B-10; Ex. C at
¶ 5.
33
Ex. B-8.
34
Ex. B-8.
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 9
xxxxxxx included in this email a link to her website, www.jaimevrinios.com. When those
solicited visited the “Must Have” section of Vrinos’s website, they were provided with an
embedded link to the website for ASEA: 35
-I@> 'I
i:f~";·;~"~·.
mle'sfavorlte Must Haves
Med•cal Mm;hrqpm Cntfee
WhOli ~OOdi Markt!
Like Mary Kay, ASEA is a direct sales company. When those solicited clicked on the
ASEA link, as Defendant directed them to do, they were sent to xxxxxxx’ personal ASEA page: 36
35
Ex. B-2.
36
Ex. B-3.
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 10
Welcome to the ASEA Site of
xxxxxxxxxxxxx
Thank you for visiting my ASEA website! As you review its am tents. I
hope you get a feel for the groundbreaking products and the lucrative
busim~ opportunity that await you at ASEA. While you are weloome to
peruse my site. I would also welcome the opportunity to talk to you one--
on-one and answer any questions you may haveaboul any aspect of
ASEA. Please click on the link below to connect with me. I look forward to
speaking with you!
Once at her individual ASEA page, Mary Kay’s sales representatives could purchase from
xxxxxxx the ASEA products she was selling as an ASEA “Independent Associate”: 37
You have nothing to lose and everything to gain.
Give ASEA REDOX a try today!
If you have any qut. ~tians
"""""'"" 9000
This mass mailing, further solicited Mary Kay’s sales representatives to “partner” with her
by “click[ing]” on the embedded link for her website, “jamievrinios.com”: 38
37
Ex. B-4.
38
Ex. B-8.
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 11
If you would like to partner v.'.ith xxxxx ptease click belo, .
gamievrinros.com
And, just as the “Must Have” section of Vrinos’s website was used to solicit them to
purchase ASEA product, so too did xxxxxxx use it to recruit Mary Kay’s sales force to sign up
through xxxxxxx as ASEA Independent Associates and “partner” with her to sell these same
products: 39
11 ;,dVe any questions
yvu.
"""'"""""' 9000
At her deposition, xxxxxxx testified that her “assistant,” Jenny Chavez, sent out the
April 16th solicitation email and “handled” the email distributions lists on her behalf. 40 Chavez
was once a Mary Kay IBC, until her resignation months ago, when Chavez subsequently joined
xxxxxxx at other direct sales companies. 41 Chavez testified that “when [Vrinos] wants to send an
email to a group of people” Chavez “typically compose[s] the email” and “send[s] it to [xxxxxxx]
39
Ex. B-4.
40
Ex. B-1 at 206:25-207:3.
41
Ex. B-1 at 200:1-21.
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 12
for approval,” because Chavez is “sending [the emails] out on her behalf.” 42 Simply put, xxxxxxx
asked Chavez “to do the e-mails” and, once approved by xxxxxxx (including the email’s content),
she sends the email out. 43Consistent with this practice, Chavez testified that she sent out the
April 16th email—and that she may have sent this solicitation out a dozen to half-dozen times
prior to April 16th as well. 44
In Chavez’s own words, “[a] lot of people from Mary Kay” received the “April 16th
email.” 45 This was because she “sent the email to a distribution listthat [she] was no longer
supposed to use.” 46 Chavez explained that the email solicitation was sent through the online
marketing platform, Constant Contact, which allows an account user (like xxxxxxx) to send a single
email to selected individuals through stored email distribution lists containing the contact
information for those same individuals. 47
Before Chavez sent the April 16th solicitation through Constant Contact per xxxxxxx’
direction, Chavez chose the “select all” option—meaning that she “selected all” email distribution
lists to receive the email, such that itwas sent to every individual whose email address was
contained in any distribution list xxxxxxx stored in Constant Contact. Chavez conceded that these
distribution lists included “the names and email addresses of . . . individuals Ms. xxxxxxx knew
from her time as an NSD” and “email addresses that [xxxxxxx] had acquired while an NSD.” 48
42
Ex. B-5 at 10:3-11:20.
43
Ex. B-5 at 11:1-20.
44
Ex. B-5 at 25:21-26:14.
45
Ex. B-5 at 34:1-3.
46
Ex. B-9.
47
Ex. B-5 at 28:15-30:17.
48
Ex. B-5 at 30:9-17; 53:14-56:18.
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 13
When presented with an export-file produced in discovery identifying all the individuals
receiving the solicitation and the email “distribution list” with which they were associated,49
Chavez confirmed that the distribution lists selected were “Mary-Kay” lists: 50
Q. Now, she’s referring to – when she says, “You didn’t send it to MK,” she’s
referring . . . to the MK list; right?
A. Correct, that’s when she’s talking about the list.
Q. But we know now you did; right?
A. Yes.
These email distribution lists included, among others, the “Shine,” “Pacesetter,” and” NSD
Final” email distribution lists that xxxxxxx stored in Constant Contact. 51 Chavez admitted that she
could have removed these “Mary Kay” distribution lists from the Constant Contact platform, but
did not do so because she (wrongly) believed xxxxxxx had the “right” to send the April 16th email
out to whomever she wanted: 52
Q. And we can look in the e-mail list portion of this spread sheet and determine
whether or not these folks had some affiliation with Mary Kay or not; right?
A. Correct.
Q. Based on the name of the list; right?
A. Correct.
Q. And just like the second tab, in the third tab there is a lot of folks on this list
... that had an affiliation with Mary Kay?
A. Correct.
Q. And it’s fair to say because you felt Miss xxxxxxx had a right to do it, no one
scrubbed either of these two tabs to ensure that non Mary Kay people
received it; right?
49
Ex. B-10.
50
Ex. B-5 at 48:17-23.
51
Ex. B-5 at 15:4-9; 56:3-18.
52
Ex. B-5 at 68:12-19.
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 14
A. Correct . . . .
Chavez nevertheless conceded that sending the mass solicitation to Mary Kay’s sales force
was a “huge” breach “[b]ecause it could violate the restrictions Mary Kay” had with xxxxxxx “at
that time,” as xxxxxxx “knew she wasn’t supposed to send e-mails to the folks on [these Mary Kay]
list[s]:”53
Q. And it was a big one; right?
A. Huge.
Q. Because it could violate the restrictions Mary Kay had at that time; right?
A. Sure, yeah.
Q. And it was what she told you that she herself knew she shouldn’t be doing;
right?
A. Correct.
2. The “CEO Series” Solicitation.
Notwithstanding the filing of this litigation—and the Court’s Temporary Injunction—
xxxxxxx continued her campaign to solicit Mary Kay’s sales force. Mary Kay learned that, in
September of this year, xxxxxxx promoted—and offered for sale to Mary Kay’s sales force—
training and coaching services that Mary Kay does not sell or endorse (i.e.,xxxxxxx’ purported
“CEO Series”). In exchange for nearly $2,000.00, for instance, Defendant is offering “one-on-one
coaching” to Mary Kay’s sales representatives that she promises will “unleash [their] full
potential:” 54
53
Ex. B-5 at 48:17-8; 69:3-15.
54
Ex. B-6.
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 15
CEO Series
COMMUNICATE - EXPAND - OPTIMIZE
! !-'.1 '''' ·'j I', ,
..........:..11
•
/ :$ 1100
ECO
1 SESSION J Si299
.5, SESSU!l:rt5 f Sl 199'
101.SW! 0'11.5 I .$ 1099
""RA D·ICAL RESU I!.TS REQU I :RE ZIERO DO·UBT.'f
Register at www.jamievrinios .c:cm
Chavez testified that this “CEO Series” solicitation was a “promotion” for advertising
Defendant’s “coaching” services: 55
Q. That’s an announcement, flyer?
A. Correct.
Q. It’s a promotion?
A. Correct.
Q. It’s an advertisement?
A. Correct.
Q. And in this case it’s a promotion for a CEO series; right?
A. Correct.
Q. And Miss xxxxxxx is making an offer or a promotion, an advertisement to
do some coaching for folks; right?
Preview
FILED DALLAS COUNTY 6/28/2019 3:33 PM FELICIA PITRE DISTRICT CLERK Veronica Vaughn CAUSE NO. DC-18-05560 MARY KAY INC., § IN THE DISTRICT COURT OF § Plaintiff, § § v. § 116th JUDICIAL DISTRICT § xxxxx xxxxx xxxxxxx, § § Defendant. § DALLAS COUNTY, TEXAS PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT DATE: June 28, 2019 /s/ Christopher J. Schwegmann Christopher J. Schwegmann Texas Bar No. 25051315 cschwegmann@lynnllp.com Jared D. Eisenberg Texas Bar No. 24092382 jeisenberg@lynnllp.com LYNN PINKER COX & HURST, LLP 2100 Ross Avenue, Suite 2700 Dallas, Texas 75201 Telephone: 214-981-3800 Facsimile: 214-981-3839 Jill Herz Texas Bar No. 00785930 service@jillherz.com ATTORNEY AT LAW 430 Founders Square 900 Jackson Street Dallas, Texas 75202 (214) 745-4567 – (Telephone) (214) 745-1156 – (Facsimile) ATTORNEYS FOR PLAINTIFF MARY KAY INC. TABLE OF CONTENTS TABLE OF CONTENTS ................................................................................................................. i I. INTRODUCTION .............................................................................................................. 1 II. FACTUAL BACKGROUND ............................................................................................. 4 A. MARY KAY INC. ...................................................................................................... 4 B. THE NSD AGREEMENT ............................................................................................ 5 C. THE FSP AGREEMENT ............................................................................................. 6 D. THE NSD AMENDMENT ........................................................................................... 6 E. xxxxxxx BREACHES THE NSD AND FSP AGREEMENTS ............................................ 8 1. The “Health and Wellness” Promotions. .................................................... 9 2. The “CEO Series” Solicitation.................................................................. 15 3. Improper Use of “Contact Information” Acquired While at Mary Kay. .. 18 F. PROCEDURAL SUMMARY ....................................................................................... 19 III. ARGUMENT .................................................................................................................... 20 A. LEGAL STANDARD ................................................................................................. 20 B. THE COURT SHOULD GRANT SUMMARY JUDGMENT ON MARY KAY’S CLAIMS FOR BREACH OF CONTRACT .......................................................................................... 20 1. There is No Dispute of Fact Regarding the Elements of the Claim.......... 21 2. There is No Dispute of Fact that these Breaches Are Material................. 22 3. There is No Dispute of Fact that these Breaches Caused Harm. .............. 24 C. THE COURT SHOULD GRANT SUMMARY JUDGMENT ON ALL OF xxxxxxx’S CLAIM BECAUSE OF THE COVENANT NOT TO SUE AND RELEASE AGREEMENT BARS ALL CLAIMS RELATING TO OR ARISING OUT OF THE BUSINESS RELATIONSHIP BETWEEN THE PARTIES .......................................................................................................... 24 D. THE COURT SHOULD GRANT SUMMARY JUDGMENT ON xxxxxxx’S CLAIM FOR BREACH OF CONTRACT .......................................................................................... 26 E. THE COURT SHOULD GRANT SUMMARY JUDGMENT ON xxxxxxx’S CLAIM FOR BREACH OF FIDUCIARY DUTY................................................................................ 27 F. THE COURT SHOULD GRANT SUMMARY JUDGMENT ON xxxxxxx’S CLAIMS FOR RELIGIOUS DISCRIMINATION AND RETALIATION UNDER THE FCRA ..................... 29 G. THE COURT SHOULD GRANT A NO-EVIDENCE MOTION FOR SUMMARY JUDGMENT ON xxxxxxx’S CLAIM FOR RELIGIOUS DISCRIMINATION ........................................ 33 H. THE COURT SHOULD GRANT A NO-EVIDENCE MOTION FOR SUMMARY JUDGMENT ON xxxxxxx’S CLAIM FOR RETALIATION ................................................................ 34 IV. CONCLUSION ................................................................................................................. 35 i Plaintiff Mary Kay Inc. (“Plaintiff” or “Mary Kay”) files this Motion for Summary Judgment (“Motion”), and in support thereof, respectfully shows the Court as follows: I. INTRODUCTION In the fall of 2017, Mary Kay decided to exercise its right to terminate the contracts of former Independent National Sales Director xxxxx xxxxx xxxxxxx, a decision that would have ended xxxxxxx’s right to certain monthly payments made to her under a deferred compensation award program. Mary Kay agreed, however, not to terminate those contracts in exchange for, among other things, xxxxxxx’s agreement: (1) not to solicit the Mary Kay’s sales force to purchase products and services not offered by Mary Kay; (2) to “delete or destroy” all personal contact information about Mary Kay’s sales force that she received during her tenure as a National Sales Director, and importantly, (3) not to sue – and thereby release – Mary Kay from all claims, whether known or unknown, “relating to or arising out” of her business relationship with Mary Kay. Before the ink was even dry, xxxxxxx began a targeted email campaign to promote non-Mary Kay products to Mary Kay’s sales force using the very same confidential contact information that she promised to delete or destroy. As a result, Mary Kay sued xxxxxxx to stop her repeated solicitation of the Mary Kay sales force. The Court should grant summary judgment on Mary Kay’s claim for breach of contract. xxxxxxx agreed that she would not: (i) promote, distribute or sell to other members of the Mary Kay sales organization any products or services which are not produced, sold, or endorsed by Mary Kay; (ii) solicit, directly or indirectly, members of the Mary Kay sales organization to sell products or services other than those sold by Mary Kay; and (iii) use, or knowingly permit any other person to use, any names, mailing lists or other information which she obtained during her association with Mary Kay for the promotion or the sale of any other company’s products or PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 1 services. xxxxxxx acknowledged and agreed that these were material terms and that any breach of these obligations would result in the forfeiture of the monthly payments described above. As is conclusively shown below, xxxxxxx sent a number of email blasts – more than 6,600 emails in total – to members of the Mary Kay sales organization, encouraging them to purchase products and services not offered by Mary Kay. None of those facts is disputed. Accordingly, this Court should grant summary judgment on Mary Kay’s claim for breach of contract. Having no other defense for her conduct, xxxxxxx instead chose to go on the offensive. On June 6, 2018, xxxxxxx sued Mary Kay for breach of contract, alleging Mary Kay wrongfully terminated her monthly payments, despite her promise not to sue and her own failure to abide the terms of her agreements with Mary Kay. In August 2018, xxxxxxx filed a charge of discrimination with the EEOC in Tampa, Florida, suggesting that Mary Kay – a company founded on Christian principles – discriminated against xxxxxxx because she is a Christian. On February 22, 2019, after the EEOC dismissed her charge of discrimination with an explicit finding of “no employer/employee relationship,” xxxxxxx asserted additional counterclaims for breach of fiduciary duty, religious discrimination, and unlawful retaliation. Mary Kay did not discriminate against xxxxxxx – or anyone else – on the basis of religion. And as explained below, xxxxxxx cannot succeed on any of these counterclaims as a matter a law. Mary Kay respectfully asks this Court to grant summary judgment on xxxxxxx’s counterclaims for breach of contract, breach of fiduciary duty, unlawful religious discrimination, and for retaliation under the FLORIDA CIVIL RIGHTS ACT (“FCRA”) for the following reasons: First, xxxxxxx entered into an express release agreement and covenant not to sue which expressly bars these counterclaims. 1 xxxxxxx agreed, as an “inducement to forgo immediate 1 See Ex. A-2 (NSD Amendment) at § 7. PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 2 termination and permit [her] the opportunity to participate in the Family Security Program,” that she would not bring any action or any claim “relating to or arising out of” her agreements with Mary Kay or her business relationship with the company, thereby “releasing Mary Kay from any alleged claims and rights of xxxxxxx, known or unknown.” xxxxxxx’s counterclaims all fall squarely within the scope of the release and covenant not to sue. The Court should grant summary judgment on all of xxxxxxx’s claims for this reason alone. Second, xxxxxxx expressly disclaimed the existence of a fiduciary relationship between herself and Mary Kay when she executed the Family Security Program Agreement (the “FSP Agreement”). 2 The FSP Agreement, which xxxxxxx herself seeks to enforce, states: “Nothing contained in the [FSP Agreement], and no action taken pursuant to its provisions, shall create or be construed to create a trust or a fiduciary relationship of any kind between the Company and [xxxxxxx].” The plain language of the FSP Agreement bars a claim for breach of fiduciary duty on its face. And because xxxxxxx has no evidence to prove the existence of any other fiduciary duty, the Court should grant summary judgment on this claim. Third, xxxxxxx’s claim for unlawful religious discrimination and retaliation fails as a matter of law because she was not a Mary Kay employee, a classification that xxxxxxx has renounced multiple times in her contracts with Mary Kay, in the books she authored, and even in her own sworn testimony in this case. Her repudiation has been so consistent and compelling that even the EEOC was convinced that her relationship with Mary Kay fell outside the employer/employee relationship. 3 xxxxxxx was an independent contractor, and as such, she cannot pursue relief for religious discrimination under the FCRA as a matter of law. 2 See Ex. A-3 (FSP Agreement) at § 7.1. 3 Ex. B-11. PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 3 Finally, and in the alternative, Mary Kay asks this Court to grant a no-evidence motion for summary judgment on xxxxxxx’s claims for breach of fiduciary duty, religious discrimination, and unlawful retaliation. xxxxxxx has had more than sufficient time for discovery. She has no evidence of a fiduciary duty. She has no evidence that she was a Mary Kay employee; nor does she have any evidence to support any of the elements of those claims. Accordingly, the Court should grant summary judgment on those counterclaims. II. FACTUAL BACKGROUND A. MARY KAY INC. Mary Kay is a manufacturer and wholesale distributor of cosmetics, toiletries, skin care, and related products. Mary Kay does not sell products directly to the consumer. Instead, Mary Kay sells its products at wholesale prices and on a pre-paid basis, to self-employed Independent Beauty Consultants (“IBCs”). The IBCs then offer the products directly to their customers at retail prices, through personal contacts—such as at-home parties. Mary Kay offers IBCs information, such as product knowledge that they can, in turn, share with their customers to provide the highest level of customer service and product satisfaction. Mary Kay offers certain IBCs who demonstrate exceptional abilities in aiding, counseling, and inspiring other IBCs—and IBCs and who distinguish themselves through success—to become Independent National Sales Directors (“NSDs”). The NSD program offers participants the opportunity to earn increased special incentive compensation, the opportunity to participate in certain advertising and other programs using Mary Kay’s trademarks as authorized by Mary Kay, and other valuable rights, privileges, and benefits. In addition, as part of her participation in the program, an NSD receives valuable information covering cosmetic arts, leadership, business management, motivation, and selling PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 4 techniques through personal participation in conferences, business meetings, and seminars, and through other Mary Kay sponsored programs and events. Significantly, and as part of her participation in the NSD program, an NSD receives personal access to Mary Kay reports and other confidential information, including comprehensive lists of names, addresses, telephone numbers, and detailed records of other Mary Kay IBCs’ and NSDs’ sales information. B. THE NSD AGREEMENT xxxxxxx executed an Independent National Sales Director Agreement (“NSD Agreement”) on December 1, 2002. 4 Among other rights and benefits, Mary Kay gave xxxxxxx access to personal information and data for thousands of Mary Kay IBCs, including their email and home addresses, phone numbers, production, order, and other confidential information. This information was available to xxxxxxx through a Mary Kay website called InTouch. Every time xxxxxxx logged into InTouch, she had access to this information. 5 In exchange for this information, as well as other rights and benefits provided by Mary Kay, xxxxxxx agreed not to: • Promote, distribute, or sell to other members of the Mary Kay sales organization any products or services which are not produced, sold, or endorsed by Mary Kay; 6 • Solicit or recruit, directly or indirectly, Mary Kay’s independent sales force to sell products or services other than those sold by Mary Kay; 7 • Use, or knowingly permit any other person to use, any names, mailing lists, or other non-public information that she obtained during her association with Mary Kay to recruit or promote the sale of any other company’s products in the United States. 8 In addition to those agreements, xxxxxxx agreed to “delete or destroy all personal information that [she] received directly or indirectly from the Company regarding other 4 Ex. A-1. 5 Ex. B-1 at 91:14-25, 248:8-10. 6 Ex. A-1, §§ 8.6, 8.10. 7 Ex. A-1, § 8.10 8 Id. PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 5 Independent Beauty Consultants, Independent Sales Directors, and National Sales Directors in [her] possession” upon the termination of her agreements with the Company for any reason. 9 xxxxxxx acknowledges that when she signed her NSD Agreement she knew that she was prohibited from using, at will, any names and mailing lists she obtained during her time as ISD and NSD. 10 C. THE FSP AGREEMENT xxxxxxx also chose to participate in the Family Security Program (“FSP”), an award program offered to NSDs under the NSD program. The FSP offered her monthly payments and other valuable consideration upon the retiring of her Mary Kay business. In consideration for certain monthly payments of $11,042.93 over a 15-year period (the “FSP Payments”), and other valuable consideration provided by Mary Kay under the FSP Agreement, xxxxxxx agreed not to: • “[P]romote, distribute, or sell to other members of the Mary Kay sales organization in the United States of America, without the Company’s prior written approval, any products or services which are not produced, sold, or endorsed in writing by the 11 Company.” • “[E]ngage, directly or indirectly in recruiting Mary Kay Beauty Consultants, Sales Directors, or National Sales Directors in the United States of America to sell 12 products or services other than those sold by Company . . . .” • “[U]tilize or knowingly permit any other person to utilize, any names, mailing lists or other information which [she] has obtained during [her] association with the Company for recruiting or for promotion of the sale of any other company’s products or services.” 13 D. THE NSD AMENDMENT By the fall of 2017, Mary Kay chose to terminate its relationship with xxxxxxx. On October 18, 2017, xxxxxxx executed an amendment to the NSD Agreement (the “NSD Amendment”). 14 9 Ex. A-4, § 8.11. 10 Ex. B-1 at 93:23-94:5. 11 Ex. A-3, § 10.2. 12 Id. 13 Id. 14 Ex. A-2. PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 6 xxxxxxx retained an attorney to negotiate the NSD Amendment. 15 The NSD Amendment facilitated xxxxxxx’s withdrawal from the Mary Kay sales force, but allowed her to participate in the Family Security Program subject to certain conditions. Specifically, xxxxxxx agreed that: • “[A]ny contact, communication or interaction with IBCs, ISDs, or NSDs shall be in compliance with . . . sections . . . 8.10 of the [NSD] Agreement and 10.2 of her FSP Agreement.” 16 • “No other announcements of any kind whether through mail, email, social media, text messages, telephone, Voxer, or other physical, electronic, or digital messages shall be sent by [xxxxxxx] to members of [xxxxxxx’] national area, to Go Give independent Mary Kay sales force members, or any other member of the Mary Kay independent sales force to whom [xxxxxxx] was introduced or is connected based upon her status as a member of the Mary Kay independent sales force.” 17 In the NSD Amendment, xxxxxxx further “acknowledge[d] and reaffirm[ed] her understanding and agreement” that: • Section 8.10 of the [NSD] Agreement is a material provision of the [NSD] Agreement and that any breach of the terms and conditions of Section 8.10 shall be a material breach of the Agreement;” 18 and • “her obligations set forth in Section 10.2 of the Family Security Program agreement are a material provision of the Family Security Program agreement and that any breach of the terms and conditions of Section 10.2 shall be a material breach of the Family Security Program agreement.” 19 xxxxxxx agreed that her right to FSP Payments was expressly “dependent and contingent upon” her “compliance with her obligations under the terms of th[e] Amendment as well as the continuing obligations set forth in the NSD Agreement and Family Security Program 15 Ex. B-1 at 119:5-17. 16 Ex. A-2, § 3. 17 Id. at § 3(2). 18 Id. at § 5. 19 Id. PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 7 agreement.” 20 Indeed, xxxxxxx expressly agreed that any “breach of these material provisions [would] result in [her] forfeiting any right to payments under the Family Security Program.” 21 Finally, in executing the NSD Amendment, xxxxxxx entered into a covenant not to sue and explicitly released the claims she now asserts. Section 7 of the NSD Amendment states: As an inducement for Mary Kay to forgo immediate termination and permit [xxxxxxx] the opportunity to participate in the Family Security Program, [xxxxxxx] covenants and agrees she will not individually or jointly institute, maintain, assert, cooperate and/or bring any action at law or in equity, or other claim, including a claim of fraudulent inducement, by complaint, counterclaim or any other method, against the Company . . . relating to or arising out of this Agreement, this Amendment, any other agreement between the Company and [xxxxxxx], or the business relationship between the Company and [xxxxxxx], thereby releasing Mary Kay from any alleged claims and rights of [xxxxxxx], known or unknown. 22 E. xxxxxxx BREACHES THE NSD AND FSP AGREEMENTS. xxxxxxx considers herself a public figure and a brand, which she promotes as a business.23 Her business is conducted under a corporate entity named JCV Global. 24 She maintains the websites JamieVrinios.com and CrazyLikeFoxes.com. 25 She sells books, promotes podcasts, and sells products from other direct selling companies. 26 xxxxxxx markets her brand by blasting emails announcing a podcast or something else that she is doing. 27 xxxxxxx employs Jenny Chavez to “shoot out” these emails. 28 Chavez works for JCV Global, and she handles the website and any emails that are sent out.29 When xxxxxxx wants to promote an event, she asks Chavez to “shoot 20 Ex. A-2, § 5. 21 Id. (emphasis added). 22 Ex. A-2, § 7. 23 Ex. B-1 at 176:7-9, 177:10-17. 24 Id. at 36:7-11. 25 Id. at 176:10-20. 26 Id. at 177:2-23. 27 Id. at 180:14-19. 28 Id. at 180:14-19. 29 Id. at 48:14-23, 50:4-8. PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 8 out” an email. 30 xxxxxxx always has Chavez send the email blasts because that is what Chavez does for xxxxxxx. 31 1. The “Health and Wellness” Promotions. On April 16, 2018 (and the days after), xxxxxxx sent unsolicited mass emails to Mary Kay’s sales representatives promoting her “health and wellness podcast.” In doing so, she solicited business for John Monhollon, M.D., of the Florida Integrated Medical Center, and herself.32 Regarding the former, xxxxxxx not only promoted Dr. Monhollon’s medical services but offered to schedule “consultation” appointments with him, including for a series of B12 shots on which xxxxxxx promised they would receive a discount: 33 Also., if yolJl nave specific eeds and are ·nterested in a one e>n one phone consulta ·on ,vitti Dr. I'-. ontto lo . please ema1 amie at Ja "eCVrillliO§@aa. .CCDm. 1A'e \WI gel ~~OU ()111 his sched le promptf~f. Referrals from QUE" podcast parlicis;iants and seminar attem:lees ,vi II receive a d isc ount and a series of B 12 shots. lJVhen mak§ g ye>ur a,Ps;>€'1intment tatirough a ie; provide the ,c ode 7777 and et them kn•O'i'il ; 1ou area J).articipant in ttte Health & Well ess podcast ,: · h xxxxxxxxxxxxx and r. Monho en. In this same solicitation, xxxxxxx also told Mary Kay’s sales force to “check[] the JCV Must Have Section” of her website to purchase from xxxxxxx the supplements she was discussing on these podcasts: 34 I Coming soon ! We wi the s p keep checlan-g the CV 1be posti g on Jam ie's site a l1nk 10 pu roh ase lements m en · oned by D1r. Monhollon i ust Have section o t this week's podeasl. e website or delai s. Be sure to I 30 Id. at 206:24-207:3. 31 Id. at 242:19-243:5. 32 xxxxxxx did not just send this solicitation on April 16, however. To the contrary, she was relentless in her misconduct. Mary Kay learned in the days following Vrinos’s first April 16 mass-solicitation that xxxxxxx continued to send this same email promotion to the Company’s sales representatives for several days thereafter. See, e.g., Ex. B-10; Ex. C at ¶ 5. 33 Ex. B-8. 34 Ex. B-8. PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 9 xxxxxxx included in this email a link to her website, www.jaimevrinios.com. When those solicited visited the “Must Have” section of Vrinos’s website, they were provided with an embedded link to the website for ASEA: 35 -I@> 'I i:f~";·;~"~·. mle'sfavorlte Must Haves Med•cal Mm;hrqpm Cntfee WhOli ~OOdi Markt! Like Mary Kay, ASEA is a direct sales company. When those solicited clicked on the ASEA link, as Defendant directed them to do, they were sent to xxxxxxx’ personal ASEA page: 36 35 Ex. B-2. 36 Ex. B-3. PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 10 Welcome to the ASEA Site of xxxxxxxxxxxxx Thank you for visiting my ASEA website! As you review its am tents. I hope you get a feel for the groundbreaking products and the lucrative busim~ opportunity that await you at ASEA. While you are weloome to peruse my site. I would also welcome the opportunity to talk to you one-- on-one and answer any questions you may haveaboul any aspect of ASEA. Please click on the link below to connect with me. I look forward to speaking with you! Once at her individual ASEA page, Mary Kay’s sales representatives could purchase from xxxxxxx the ASEA products she was selling as an ASEA “Independent Associate”: 37 You have nothing to lose and everything to gain. Give ASEA REDOX a try today! If you have any qut. ~tians """""'"" 9000 This mass mailing, further solicited Mary Kay’s sales representatives to “partner” with her by “click[ing]” on the embedded link for her website, “jamievrinios.com”: 38 37 Ex. B-4. 38 Ex. B-8. PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 11 If you would like to partner v.'.ith xxxxx ptease click belo, . gamievrinros.com And, just as the “Must Have” section of Vrinos’s website was used to solicit them to purchase ASEA product, so too did xxxxxxx use it to recruit Mary Kay’s sales force to sign up through xxxxxxx as ASEA Independent Associates and “partner” with her to sell these same products: 39 11 ;,dVe any questions yvu. """'"""""' 9000 At her deposition, xxxxxxx testified that her “assistant,” Jenny Chavez, sent out the April 16th solicitation email and “handled” the email distributions lists on her behalf. 40 Chavez was once a Mary Kay IBC, until her resignation months ago, when Chavez subsequently joined xxxxxxx at other direct sales companies. 41 Chavez testified that “when [Vrinos] wants to send an email to a group of people” Chavez “typically compose[s] the email” and “send[s] it to [xxxxxxx] 39 Ex. B-4. 40 Ex. B-1 at 206:25-207:3. 41 Ex. B-1 at 200:1-21. PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 12 for approval,” because Chavez is “sending [the emails] out on her behalf.” 42 Simply put, xxxxxxx asked Chavez “to do the e-mails” and, once approved by xxxxxxx (including the email’s content), she sends the email out. 43Consistent with this practice, Chavez testified that she sent out the April 16th email—and that she may have sent this solicitation out a dozen to half-dozen times prior to April 16th as well. 44 In Chavez’s own words, “[a] lot of people from Mary Kay” received the “April 16th email.” 45 This was because she “sent the email to a distribution listthat [she] was no longer supposed to use.” 46 Chavez explained that the email solicitation was sent through the online marketing platform, Constant Contact, which allows an account user (like xxxxxxx) to send a single email to selected individuals through stored email distribution lists containing the contact information for those same individuals. 47 Before Chavez sent the April 16th solicitation through Constant Contact per xxxxxxx’ direction, Chavez chose the “select all” option—meaning that she “selected all” email distribution lists to receive the email, such that itwas sent to every individual whose email address was contained in any distribution list xxxxxxx stored in Constant Contact. Chavez conceded that these distribution lists included “the names and email addresses of . . . individuals Ms. xxxxxxx knew from her time as an NSD” and “email addresses that [xxxxxxx] had acquired while an NSD.” 48 42 Ex. B-5 at 10:3-11:20. 43 Ex. B-5 at 11:1-20. 44 Ex. B-5 at 25:21-26:14. 45 Ex. B-5 at 34:1-3. 46 Ex. B-9. 47 Ex. B-5 at 28:15-30:17. 48 Ex. B-5 at 30:9-17; 53:14-56:18. PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 13 When presented with an export-file produced in discovery identifying all the individuals receiving the solicitation and the email “distribution list” with which they were associated,49 Chavez confirmed that the distribution lists selected were “Mary-Kay” lists: 50 Q. Now, she’s referring to – when she says, “You didn’t send it to MK,” she’s referring . . . to the MK list; right? A. Correct, that’s when she’s talking about the list. Q. But we know now you did; right? A. Yes. These email distribution lists included, among others, the “Shine,” “Pacesetter,” and” NSD Final” email distribution lists that xxxxxxx stored in Constant Contact. 51 Chavez admitted that she could have removed these “Mary Kay” distribution lists from the Constant Contact platform, but did not do so because she (wrongly) believed xxxxxxx had the “right” to send the April 16th email out to whomever she wanted: 52 Q. And we can look in the e-mail list portion of this spread sheet and determine whether or not these folks had some affiliation with Mary Kay or not; right? A. Correct. Q. Based on the name of the list; right? A. Correct. Q. And just like the second tab, in the third tab there is a lot of folks on this list ... that had an affiliation with Mary Kay? A. Correct. Q. And it’s fair to say because you felt Miss xxxxxxx had a right to do it, no one scrubbed either of these two tabs to ensure that non Mary Kay people received it; right? 49 Ex. B-10. 50 Ex. B-5 at 48:17-23. 51 Ex. B-5 at 15:4-9; 56:3-18. 52 Ex. B-5 at 68:12-19. PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 14 A. Correct . . . . Chavez nevertheless conceded that sending the mass solicitation to Mary Kay’s sales force was a “huge” breach “[b]ecause it could violate the restrictions Mary Kay” had with xxxxxxx “at that time,” as xxxxxxx “knew she wasn’t supposed to send e-mails to the folks on [these Mary Kay] list[s]:”53 Q. And it was a big one; right? A. Huge. Q. Because it could violate the restrictions Mary Kay had at that time; right? A. Sure, yeah. Q. And it was what she told you that she herself knew she shouldn’t be doing; right? A. Correct. 2. The “CEO Series” Solicitation. Notwithstanding the filing of this litigation—and the Court’s Temporary Injunction— xxxxxxx continued her campaign to solicit Mary Kay’s sales force. Mary Kay learned that, in September of this year, xxxxxxx promoted—and offered for sale to Mary Kay’s sales force— training and coaching services that Mary Kay does not sell or endorse (i.e.,xxxxxxx’ purported “CEO Series”). In exchange for nearly $2,000.00, for instance, Defendant is offering “one-on-one coaching” to Mary Kay’s sales representatives that she promises will “unleash [their] full potential:” 54 53 Ex. B-5 at 48:17-8; 69:3-15. 54 Ex. B-6. PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT PAGE 15 CEO Series COMMUNICATE - EXPAND - OPTIMIZE ! !-'.1 '''' ·'j I', , ..........:..11 • / :$ 1100 ECO 1 SESSION J Si299 .5, SESSU!l:rt5 f Sl 199' 101.SW! 0'11.5 I .$ 1099 ""RA D·ICAL RESU I!.TS REQU I :RE ZIERO DO·UBT.'f Register at www.jamievrinios .c:cm Chavez testified that this “CEO Series” solicitation was a “promotion” for advertising Defendant’s “coaching” services: 55 Q. That’s an announcement, flyer? A. Correct. Q. It’s a promotion? A. Correct. Q. It’s an advertisement? A. Correct. Q. And in this case it’s a promotion for a CEO series; right? A. Correct. Q. And Miss xxxxxxx is making an offer or a promotion, an advertisement to do some coaching for folks; right?