Beachbody Faces Class-Action Lawsuit Over Employment Practices - Athletech News

The health and fitness company's multilevel marketing structure is being called out for failing to pay former coaches fair wages

The Beachbody Company, now known as BODi, is facing a class-action lawsuit after a former coach claims that the company misclassified coaches as independent contractors instead of employees.

The bulk of the case revolves around Beachbody's multilevel marketing (MLM) business model, which the suit claims "virtually guarantees" that the fitness company will "secure thousands of hours of free or below-market labor to execute a centralized marketing and growth strategy."

The plaintiff, Jessica Lyons, is represented by Tycko & Zavareei LLP and the Clarkson Law Firm P.C. The case has been filed in Los Angeles County Superior Court of California.

The lawsuit claims that Beachbody exploited its California sales force, known as "coaches," alleging that as coaches market and sell a variety of Beachbody's products, including workout videos, supplements and beverages, they're essentially working for free or at an extremely low wage.

The plaintiff cites Beachbody's multilevel marketing model as its means of avoiding accountability and alleges that coaches are promised the chance to build a business but are simply supplying free marketing and sales support that "would otherwise cost Beachbody millions."

Despite being trained by other coaches, reviewing Beachbody materials, marketing, distributing and selling the wellness and fitness products per the company's guidelines, the plaintiff alleges she was paid "virtually nothing" while also incurring personal costs.

Beachbody plans to "vigorously defend ourselves against these allegations," a spokesperson for the company told Athletech News.

"The independent contractor status of direct sellers is well recognized on a federal and state level," the spokesperson said in a statement. "California's updated contractor law (AB5) includes an express exemption for network marketing distributors as part of a well-established legal framework that allows distributors to remain independent and allows them to work as much or as little as they want, controlling their own schedule."

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The lawsuit against Beachbody comes as MLMs have garnered a side-eye in recent years, the result of a documentary depicting the downfall of LuLaRoe sellers, an anti-MLM Reddit community and "The Dream," a podcast that explores well-known MLMs and sheds light on issues that commonly arise due to the nature of such a business model.

Glenn Danas, partner at Clarkson Law Firm P.C., stated that the class action against Beachbody has the potential for "seismic implications" not just for the health and fitness company, but other MLM companies.

"If the court agrees with us, this will allow thousands of Beachbody' coaches' to be paid for their hard work and will upend Beachbody's business model," Danas said.

Update: This story has been updated to include comment from Beachbody