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 any 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 a Wellness Advocate breaches any of the terms of the Contract or engages in any illegal, fraudulent, deceptive, or unethical business conduct, dōTERRA may, in its sole discretion, invoke any disciplinary measure that it deems appropriate.  The potential disciplinary measures 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 payments;

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 interdicttive relief or other remedies available by law.

C. Investigation. The following procedure applies when dōTERRA investigates an alleged breach 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 honour 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.D herein will be provided upon request from the Company. 

D. Voluntary Termination. A Wellness Advocate may terminate the Contract at any time and for any reason by sending a written notice of intent to terminate to the Company at placements@doterra.com or No 2 Sandton Drive Sandton, Johannesburg, South Africa. 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 a Bonus. 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 12 and Section 17.

E. Voluntary Termination. When a Wellness Advocate voluntarily terminates their Contract, 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 breach 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 breach 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 breaches 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 the Distributor network or the Company.

J. If the Wellness Advocate cancels this Agreement under Section 19.D within 14 days of entering into it then:

1. the Wellness Advocate may require the Company to repay the Wellness Advocate within 14 days any monies which the Wellness Advocate has paid to or for the benefit of the Company or any of its other Wellness Advocates in connection with the Wellness Advocate's participation in this trading scheme or paid to any other Wellness Advocate in accordance with the provisions of this trading plan; and

2. the Wellness Advocate may return to the Company's address referred to in Section 19.D any goods which the Wellness Advocate has purchased under the trading scheme within 21 days of the date of cancellation and which remain unsold, provided that such unsold goods remain in the condition in which they were in at the time of purchase, whether or not their external wrappings have been broken, and may recover any monies paid in respect of such goods; and

3. the Wellness Advocate may cancel any services which the Wellness Advocate has ordered under the trading scheme within such 14 day period and may recover any monies paid in respect of such services, provided that such services have not yet been supplied to the Wellness Advocate.

K. In order to recover any monies paid in accordance with Section 19.J.1, J.2, and J.3. the Wellness Advocate must give notice to the Company requesting the repayment of such monies (and if applicable, returning the starter kit and any other promotional or training materials purchased by him) to the Company's address referred to in Section 19.D within 21 days of the date of cancellation and the Company shall repay such monies as the Wellness Advocate may be legally entitled to recover within 21 days of the date of cancellation. In order to recover monies paid for goods under Section 19.J.2, the Wellness Advocate must deliver the goods to the Company within 21 days of the date of cancellation to the address referred to in Section 19.D. The Wellness Advocate shall bear the cost of such delivery. The monies paid in respect of those goods is payable to the Wellness Advocate on delivery of the goods, or forthwith if the goods have not yet been delivered to the Wellness Advocate.

L. If the Wellness Advocate gives notice to terminate this Agreement more than 14 days after the Wellness Advocate entered into the Agreement, the Wellness Advocate may return to the Company any goods (including training and promotional materials, business manuals and kits) which the Wellness Advocate has purchased under the scheme within 90 days prior to such termination and which remain unsold and the Company will pay the Wellness Advocate the price (inclusive of VAT) which the Wellness Advocate paid for the goods less, where the condition of any such goods has deteriorated due to an act or default on the part of the Wellness Advocate, an amount equal to the diminution in their value resulting from such deterioration and a reasonable handling charge (which may include the cost of repackaging returned goods for resale). The Wellness Advocate shall bear the cost of such delivery.

M. The Company may terminate this Agreement at any time by giving written notice to the Wellness Advocate.  If the Company terminates this Agreement the Wellness Advocate may return to the Company any goods which the Wellness Advocate has purchased under the scheme within 90 days prior to such termination and which remain unsold for a full refund of the price (inclusive of VAT) which the Wellness Advocate has paid for them together with any costs incurred by the Wellness Advocate for returning the goods to the Company.

N. If either party terminates this Agreement the Wellness Advocate may return to the Company any goods (including training and promotional materials, business manuals and kits) which the Wellness Advocate has purchased under this tradig scheme more than 90 days but within one year prior to such termination and which remain unsold for 90% of the price (inclusive of VAT) which the Wellness Advocate has paid for them, less an amount equal to:

(i) any bonuses or other benefits (in cash or in kind) received by the Wellness Advocate in respect of those goods;

(ii) any amount due from the Wellness Advocate to the Company on any account; and

(iii) a reasonable handling charge (which may include the cost of repackaging returned goods for resale),

and provided that:

(i) such goods have not been purchased or acquired by the Wellness Advocate in breach of this Agreement;

(ii) the Wellness Advocate returns such goods to the Company in an unused, commercially resaleable condition not more than 14 days after the date of termination; and

(iii) the Company did not clearly inform the Wellness Advocate prior to the purchase that the goods were seasonal, discontinued or special promotion products which were not to be subject to the buy-back provisions of this paragraph N.

O. In order to recover monies paid for goods in accorance with this Section 19 the Wellness Advocate must deliver the goods to the Company within 21 days of such termination to the Company's address referred to in Section 19.D. The Company will bear the cost of such delivery. The purchase price is payable to the Wellness Advocate on delivery of the goods, or forthwith if the goods are already held by the Company

P. If this Agreement is terminated for any reason the Wellness Advocate will have the right to be released from all future contractual liabilities towards the Company in relation to this trading scheme, except: (a) liabilities relating to payments made to the Wellness Advocate under contracts which the Wellness Advocate has made for the Company (if any); and (b) any liability to pay the price of goods or services already supplied to the Wellness Advocate by the Company where the Wellness Advocate has not returned such goods to the Company in accordance with this Section 19; and (c) those provisions of the Contract which relate to competition with the business of the Company after termination and which shall remain in force after the date of termination

Q. The preceding pararaphs J to P of this Section 19 set out the Wellness Advocate’s statutory rights on cancellation or termination of the Contract. If any other provisions of the Contract provide the Wellness Advocate with more favourable rights in the applicable termination event then the Wellness Advocate may exercise those more favourable rights.