Section 19: Disciplinary Actions

A. Rights Conditioned Upon Performance.  A Wellness Advocate’s rights under the Contract are conditioned upon and subject to the Wellness Advocate's continued performance in accordance with the terms of the Contract. Upon failure by a Wellness Advocate to perform his or her obligations as set forth in the Contract, the Wellness Advocate's rights cease. The Company may excuse a Wellness Advocate's non-performance in whole or in part without waiving its rights and remedies under the Contract.

B. Possible Disciplinary Actions.  If Wellness Advocates violate any of the terms and conditions of the Contract or engage in any illegal, fraudulent, deceptive, or unethical business conduct, dōTERRA may, in its sole discretion, invoke any disciplinary action that it deems appropriate.  The potential disciplinary actions are:

1. Issue an oral and/or written warning or admonition to the Wellness Advocate;

2. Closely monitor the conduct of the Wellness Advocate over a specified period of time to ensure performance of the contractual duties; 

3. Require the Wellness Advocate to provide the Company with additional assurances that the Wellness Advocate’s performance will be in compliance with the Contract. Further assurances may include requiring the Wellness Advocate to take certain actions in an effort to mitigate or correct non-performance; 

4. Deny or suspend privileges that are awarded from time to time by the Company or cease performing the Company's obligations under the Contract, including but not limited to, awards, recognition at corporate events or in corporate literature, participation in Company-sponsored events, placement of product orders, promotion within the Sales Compensation Plan, access to Company information and genealogies, or the Wellness Advocate’s participation in other Company programs or opportunities; 

5. Discontinue or limit payment of Bonuses from all or any part of the sales of the Wellness Advocate or the Wellness Advocate’s Organization;

6. Impose a fine, which may be imposed immediately or withheld from future Bonus or commission checks;

7. Reassign all or part of the Wellness Advocate’s Organization;

8. Adjust the Wellness Advocate’s status;

9. Suspend the Wellness Advocate, which may result in termination or reinstatement with conditions or restrictions;

10. Terminate the Distributorship of the Wellness Advocate; and

11. Seek injunctive relief or other remedies available by law.

C. Investigation.  The following procedure applies when dōTERRA investigates an alleged violation of the Contract: 

1. The Company will either provide the Wellness Advocate with a verbal notice and/or send a written notice of the alleged breach of Contract. Each Wellness Advocate agrees that the relationship between a Wellness Advocate and the Company is entirely contractual. Accordingly, the Company will neither honor nor respect any claim by a Wellness Advocate that the relationship is or has been quasi-contractual, has arisen by implication from any continuing practice or course of action, has been verbally authorized by an employee of the Company in contradiction of the terms of the Contract, or is otherwise implied in fact. 

2. In a case when written notice is sent, the Company will give the Wellness Advocate ten business days from the date of dispatch of a notification letter during which the Wellness Advocate may present all information relating to the incident for review by the Company.  The Company reserves the right to prohibit activity (e.g. placing orders, sponsoring, modifying Wellness Advocate information, receiving Bonuses, etc.) by the Distributorship in question from the time notice is sent until a final Company decision is rendered. 

3. On the basis of any information obtained from collateral sources and from the Company's investigation of the statements and facts taken together with information submitted to the Company during the response period, the Company will make a final decision regarding the appropriate remedy, which may include the termination of the Contract with the Wellness Advocate. The Company will promptly notify the Wellness Advocate of its decision. Any remedies will be effective as of the date on which notice of the Company's decision is dispatched.

4. Additional information outlining an appeal of the decision by the Company and the Company's Dispute Resolution policy noted in Section 22.Cherein will be provided upon request from the Company. 

D. Request for Termination.  A Wellness Advocate may request to terminate the Contract at any time and for any reason by sending a written notice of intent to terminate to the Company.  A Person whose Distributorship is terminated may not sign up again as a Wellness Advocate for six months from the date of last activity if the Wellness Advocate achieved the Rank of Premier or lower.  If the Wellness Advocate has achieved the Rank of Silver or higher, the person must wait twelve months before signing up as a Wellness Advocate with dōTERRA.  Activity includes but is not limited to purchasing product, recruiting other Wellness Advocates, or earning commissions. All obligations regarding confidentiality of information and the Wellness Advocate network survive termination of the Contract, including but not limited to the obligations outlined in Section 12and Section 17.

E. Voluntary Termination.  When a Distributorship is voluntarily terminated, the account is placed in a suspended status for a period of twelve months from the date of last activity, after which period the account is actually terminated and removed from the genealogy tree.  In other words, a suspended account stays in the genealogy tree until it is actually terminated by the Company; there is no “roll-up” of Downline during the suspension period.  Due to the Sale Compensation Plan’s compression, however, volume will roll-up past the suspended Wellness Advocate, allowing for maximum payout.

F. Inactivity.  A Distributorship may be terminated by the Company if the Distributorship is not Active or if the Annual Renewal Fee has not been paid.  

G. Co-applicant Binds Distributorship.  The act of any participant or co-applicant in a Distributorship, or spouse or partner of a Wellness Advocate, is attributable to the Distributorship and any remedies, including termination of the Contract, necessitated by that act may be applied to the Distributorship generally. 

H. Time Limitation on Claims Made.  The Company will not review any violation of the terms and conditions of the Contract not brought to the Company's attention within two years of the initiation of the alleged violation. Failure to report a violation within the two-year period will result in the Company not pursuing the allegations in order to prevent stale claims from disrupting the ongoing business activities of Distributorships. All reports of violations must be in writing and sent to the attention of dōTERRA‘s legal department.

I. Action Against a Wellness Advocate.  The Company may take action against a Wellness Advocate as outlined in this Section 19 of the Policy Manual and elsewhere in the Contract if the Company determines, in its sole discretion, that the Wellness Advocate's conduct or the conduct of any participant in the Distributorship is detrimental, disruptive, or damaging to the well-being or reputation of a Distributorship or the Company.