Company:doTerra

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Short description: American multi-level marketing company

doTerra
TypePrivate
IndustryMulti-level marketing[1][2]
Founded2008 (2008)
FoundersDavid Stirling, Mark A. Wolfert, Corey B. Lindley, Dr. David K. Hill, Emily Wright, Gregory P. Cook, Robert J. Young
Headquarters
Pleasant Grove, Utah
,
United States
Area served
International
Key people
Corey Lindley, CEO
Emily Wright, President[3]
ProductsEssential oils, skin care, nutrition, health and beauty
Number of employees
4,461 (2022)[4]
Website{{{1}}}

doTerra (styled dōTERRA or doTERRA) is a multi-level marketing[1][2] company based in Pleasant Grove, Utah, that sells essential oils and other related products. doTerra was founded in 2008 by former executives of Young Living and others.[5] The company's products are sold through independent distributors called Wellness Advocates, using a multi-level marketing model to sell its products. Distributors are eligible to receive commissions based on their own sales and the sales of others in their organization.[5]

The company and its representatives have repeatedly come under fire for misleading claims that their products could help prevent or cure diseases such as cancer, autism, Ebola and more recently, COVID-19, even being the target of a warning from the Food and Drug Administration and the Federal Trade Commission.[6][5][7][8]

History

doTerra kit

The company was established in April 2008 by David Stirling, Emily Wright, David Hill, Corey B. Lindley, Gregory P. Cook, Robert J. Young, and Mark A. Wolfert. Stirling, Wright, and Hill were former executives of Young Living, a company that also sells essential oils via multi-level marketing.[5] Its name is inspired by the Latin phrase for "gift of the Earth". The company initially launched with 25 single oils and ten oil blends.[9]

In August 2013, Young Living filed suit against doTerra for theft of trade secrets, alleging that the company had re-created their production process illegally.[10][11] During the lawsuit between the two companies, Young Living produced an analysis of doTerra products that suggested the company was using synthetic chemicals in their "organic" products.[12] Testimony was given that the oils, which were tested by the Centre National de la Recherche Scientifique, did not match any oils sold by doTerra.[13] As of 2013, doTerra reported having about 450 corporate employees, 350 at the Utah headquarters, and 100 at offices in Taiwan, Japan, Europe, and Australia. Later, the company announced that it would build a new headquarters in Pleasant Grove, Utah.[14] In 2014, the company was selling over 150 products such as supplements, personal care items, and essential oils.[15]

In October 2014, the Fourth District Court dismissed the claims made against doTerra; the companies also settled lawsuits regarding faked lab tests, false advertising, and theft of trade secrets and withdrew their negative claims in relation to the purity of each other's products.[1]

doTerra citrus bliss hand lotion

In 2015, the number of "Wellness Advocates" joining the company grew by more than 120 percent.[16] By year-end 2015, the company claimed that it had generated more than $1 billion in sales.[5] In April 2016, doTerra sent letters to distributors advising them that a breach in a system where personal information was stored had occurred in March 2016. Personal information potentially acquired in the breach included names, dates of birth, social security numbers, addresses, telephone numbers, email addresses, debit and credit card numbers, usernames, and passwords. The company explained that a third-party vendor was at fault. To compensate, the company offered 24 months of credit monitoring through AllClear, a credit monitoring company.[17][18][19][20]

As of 2017, doTerra reported having approximately 1,650 corporate employees and over 3 million Wellness Advocates across 100 countries.[21][22]

In July 2018, the court ruled that Young Living acted in bad faith and had misled the court, thus the judge ordered Young Living to cover doTerra's attorney costs.[23] In 2021, doTerra recalled 1.3 million bottles of its oils due to the lack of child resistant packaging.[24] In April 2022, doTerra entered into a $5 million agreement with the University of Mississippi to research essential oils.[25]

Distributor claims

On September 22, 2014, the U.S. Food and Drug Administration issued an FDA Warning Letter to doTerra for its distributors marketing products as possible treatments or cures for Ebola, cancer, autism, and other conditions in violation of the Food, Drug and Cosmetic Act.[6][26][27][28] Federal agents conducted an investigation of doTerra's files.[5]

Some distributors have promoted the company's products for air purification and protection against the health effects of smoke from the California wildfires.[29] It was alleged in 2018 that some distributors had offered personal stories to customers claiming that their child had benefited from essential oils.[7][5]

In 2020, some doTerra distributors attempted to benefit from public concern regarding COVID-19 by claiming that the company's products have immune-boosting properties, despite no scientific evidence to support such claims.[30][31] The Federal Trade Commission warned the company it must stop making such unfounded health claims and exaggerated earnings by its distributors.[8]

More than a dozen women working for doTerra’s frankincense supplier, a Somaliland company called Asli Maydi, reported poor pay, sexual abuse and unhealthy work conditions. According to the Fuller Project, the abuse continued for years after victims contacted doTerra.[32] The company suspended its operations in Somaliland and launched an independent investigation into the allegations.[33]

In 2023, the U.S. Department of Justice, on behalf of the Federal Trade Commission, won lawsuits against three doTERRA distributors for making claims that the company’s essential oils and dietary supplements could treat, prevent, or cure COVID-19, in violation of the FTC Act and the COVID-19 Consumer Protection Act. According to the court order, the defendants were prohibited from making further claims that DoTerra products can prevent, cure, or treat without Food and Drug Administration approval; ordered to provide reliable human clinical testing to support claims about other diseases; prohibited from mispresenting that the product’s benefits are scientifically or clinically proven; and were required to pay a $15,000 civil penalty.[34]

Projects

doTerra Healing Hands Foundation

The doTerra Healing Hands Foundation is a 501(c)(3) non-profit organization established by doTerra in 2012.[35] In 2016, the foundation partnered with the non-profit organization Choice Humanitarian to send staff and distributors to Nepal and Guatemala to install vented brick stoves for families.[36]

In 2017, the doTerra Healing Hands organization began collecting donations from its distributors in the wake of Hurricane Harvey to cover the costs of providing relief packs containing samples of the company's products to evacuees in Dallas. In October 2017, Pacific Standard reported that after collecting donations, doTerra did not deliver the shipments, allegedly due to weather conditions, and described the incident as "a modern example of malfeasance masquerading as altruism—a type of scam often found in multi-level marketing organizations." In an update to their report in March 2018, Pacific Standard noted that doTerra did eventually send shipments of doTerra hygiene packs to residents in Houston.[37]

Kealakekua Mountain Reserve

In 2018, the company purchased $7.3 million of land in the Kealakekua Mountain Reserve to source its sandalwood on Hawaii's Big Island. doTerra announced a 10-year plan to use dead sandalwood for its essential oil production while keeping 75 percent of the land forested. It built a nursery on the reserve to grow saplings and protect from tree-killing species. doTerra has planted 300,000 native trees and claims it will plant more than 1 million by 2030.[4]

References

  1. ↑ 1.0 1.1 1.2 Harvey, Tom (October 23, 2014). "Judge dismisses much of lawsuit between rival Utah 'oils' companies". The Salt Lake tribune. http://www.sltrib.com/home/1739671-155/living-doterra-claims-distributors-judge-companies?fullpage=1. 
  2. ↑ 2.0 2.1 Miers, Claire (April 8, 2015). "Essential oils a booming business". Star-Telegram. http://www.star-telegram.com/living/health-fitness/article17889908.html. 
  3. ↑ "doTERRA Announces New Executive Leadership". 21 December 2021. https://news.doterra.com/NewExecutiveLeadership. 
  4. ↑ 4.0 4.1 Paula Dobbyn (23 May 2022). "How A Wellness Company Is Saving Sandalwood On The Big Island". Honolulu Civil Beat. https://www.civilbeat.org/2022/05/how-a-wellness-company-is-saving-sandalwood-on-the-big-island/. 
  5. ↑ 5.0 5.1 5.2 5.3 5.4 5.5 5.6 Monroe, Rachel (October 9, 2017). "How Essential Oils Became the Cure for Our Age of Anxiety". New Yorker. https://www.newyorker.com/magazine/2017/10/09/how-essential-oils-became-the-cure-for-our-age-of-anxiety. 
  6. ↑ 6.0 6.1 Ohlheiser, Abby (24 September 2014). "FDA warns three companies against marketing their products as Ebola treatments or cures". Washington Post. https://www.washingtonpost.com/news/to-your-health/wp/2014/09/24/fda-warns-three-companies-against-marketing-their-products-as-ebola-treatments-or-cures/. 
  7. ↑ 7.0 7.1 Butler, Kiera (February 23, 2018). "How Multilevel Marketing Companies Got the Autism Community Hooked on Essential Oils". Mother Jones. https://www.motherjones.com/politics/2018/02/doterra-young-living-multilevel-marketing-companies-got-autism-community-hooked-essential-oils/. 
  8. ↑ 8.0 8.1 Graham, Megan (April 27, 2020). "FTC warns multilevel marketing company sellers about coronavirus health and earnings claims". CNBC. https://www.cnbc.com/2020/04/27/ftc-warns-doterra-rodan-fields-other-mlm-sellers-on-covid-claims.html. 
  9. ↑ Guinness, Meredith (11 January 2016). "Stratford Woman Teams With Sister-In-Law In Essential Oil Business". Stratford Daily Voice. http://stratford.dailyvoice.com/business/stratford-woman-teams-with-sister-in-law-in-essential-oil-business/612807/. 
  10. ↑ Harvey, Tom (1 August 2013). "Essential oils rivalry spills into Utah courts". Salt Lake Tribune. http://www.sltrib.com/sltrib/money/56660253-79/doterra-living-oils-lawsuit.html.csp. 
  11. ↑ "Young Living Essential Oils, LC (Plaintiff) v. doTERRA, Inc., et al. (Defendants)". United States District Court for the District of Utah Central Division. July 18, 2013. http://cdn.cymbeo.com/f/69rwmp3g/50c69ly3gzy/Dkt.pdf. 
  12. ↑ Keeson, Arvid (15 August 2014). "Damning Evidence That Young Living and DoTERRA's Essential Oils are Adulterated". Utah Stories. http://www.utahstories.com/2014/08/damning-evidence-that-young-living-and-doterras-essential-oils-are-adulterated/. 
  13. ↑ Markosian, Richard (21 August 2014). "Report Used in Young Living Farms Case Against DoTERRA Suspect". Utah Stories. http://www.utahstories.com/2014/08/report-used-in-young-living-farms-case-against-doterra-suspect/. 
  14. ↑ Allred, Cathy. "doTERRA to bring 330 new jobs to Utah County (press release)". Daily Herald (Provo, Utah) (February 17, 2013). http://www.heraldextra.com/news/local/north/pleasant-grove/doterra-to-bring-new-jobs-to-utah-county/article_68504b3a-dce1-57dc-a9ed-4e7fa7e5209e.html. 
  15. ↑ "doTerra Oils - Making Soap Naturally" (in en-US). 2019-02-02. https://makingsoapnaturally.com/doterra-oils. 
  16. ↑ "doTerra Hit $100 Million Per Month" (in en-US). 15 June 2016. https://www.businessforhome.org/2016/06/doterra-hit-100-million-per-month/. 
  17. ↑ Davis, Jeremy Seth (April 19, 2016). "DōTERRA breach exposes customer info; including SS, DOB, and addresses". SC Media. https://www.scmagazine.com/d%C5%8Dterra-breach-exposes-customer-info-including-ss-dob-and-addresses/article/529119/. 
  18. ↑ Associated Press (April 27, 2016). "Utah essential oil company announces third-party data breach". Seattle Times. https://www.seattletimes.com/business/utah-essential-oil-company-announces-third-party-data-breach/. 
  19. ↑ Romero, McKenzie (April 25, 2016). "doTERRA letter informs customers of possible data breach". Deseret News. https://www.deseretnews.com/article/865652932/doTERRA-letter-informs-customers-of-possible-data-breach.html. 
  20. ↑ "Letter from Hunton & Williams Law Firm (on Behalf of DoTerra) to the Office of the New Hampshire Attorney General". State of New Hampshire Department of Justice. April 21, 2016. https://www.doj.nh.gov/consumer/security-breaches/documents/doterra-international-20160418.pdf. 
  21. ↑ "doTERRA on the Forbes America's Best Midsize Employers List" (in en). https://www.forbes.com/companies/doterra/. 
  22. ↑ Flagler, Doug (8 September 2017). "doTerra YOU Global Convention". Fox 13 Salt Lake City. http://fox13now.com/2017/09/08/doterra-you-global-convention/. 
  23. ↑ Stilson, Ashley. (July 16, 2018). "Young Living to pay $1.8M for Doterra attorney fees after lengthy court battle ", Daily Herald . Retrieved February 7, 2019.
  24. ↑ "Recall alert: dōTERRA recalls 1.3 million bottles of essential oils amid poisoning risk" (in en). 2021-04-07. https://www.kiro7.com/news/trending/recall-alert-dterra-recalls-13-million-bottles-essential-oils-amid-poisoning-risk/P64ZVJGUKJAHDACRSEV6TSQ3A4/. 
  25. ↑ Minta, Molly (2022-04-12). "Ole Miss strikes $5 million research deal with company warned for claiming essential oils can cure COVID" (in en-US). https://mississippitoday.org/2022/04/12/ole-miss-doterra-essential-oil/. 
  26. ↑ Vowell, Nicole (September 25, 2014). "2 Utah companies respond to FDA warning over health claims". Deseret News. http://www.deseretnews.com/article/865611752/2-Utah-companies-respond-to-FDA-warning-over-health-claims.html?pg=all. 
  27. ↑ Mitchell, LaTonya M (22 September 2014). "Warning letter to dōTERRA International, LLC". US Food and Drug Administration, Public Health Service. https://www.fda.gov/ICECI/EnforcementActions/WarningLetters/2014/ucm415809.htm. 
  28. ↑ Papple, Dawn. (September 25, 2014) "FDA Warning Letters: Young Living, dōTERRA Consultants Must Cease Marketing Claims That Essential Oils Fight Disease ", Inquisitr. Retrieved January 31, 2019.
  29. ↑ Butler, Kiera (October 14, 2017). "No, "Essential Oils" Will Not Clear the California Fire Smoke Out of Your Air". Mother Jones. https://www.motherjones.com/environment/2017/10/its-delusional-to-think-essential-oils-will-clear-the-california-fire-smoke-out-of-your-air/. 
  30. ↑ Graham, Megan (March 13, 2020). "Multilevel marketing sellers are using coronavirus to push oil and vitamin sales on Facebook". CNBC. https://www.cnbc.com/2020/03/13/facebook-multilevel-marketing-sellers-use-coronavirus-to-sell-oils.html. 
  31. ↑ Stevens, Ashlie D (March 17, 2020). "How essential oil sellers are trying to profit off COVID-19 fears". Salon. https://www.salon.com/2020/03/17/essential-oils-mlm-coronavirus-covid-19/. 
  32. ↑ Fobar, Rachel (7 January 2023). "Somaliland’s frankincense brings gold to companies. Its women pay the price". The Guardian. https://www.theguardian.com/world/2023/jan/07/somaliland-frankincense-female-workers-exploited-abuse. 
  33. ↑ Statement
  34. ↑ "FTC Takes Action Against doTERRA Distributors for False COVID-19 Health Claims". Federal Trade Commission. https://www.ftc.gov/news-events/news/press-releases/2023/03/ftc-takes-action-against-doterra-distributors-false-covid-19-health-claims.  This article incorporates text from this source, which is in the public domain.
  35. ↑ "doTerra Healing Hands Foundation". 9 May 2013. https://projects.propublica.org/nonprofits/organizations/272840005. 
  36. ↑ Neely, Karissa (19 May 2016). "doTerra Employees Install Stoves in Guatemala, Nepal". Daily Herald. http://www.heraldextra.com/business/local/doterra-employees-install-stoves-in-guatemala-nepal/article_208b642e-f713-500c-8db7-1037fd08fa9a.html. 
  37. ↑ Marini Higgs, Micaela (October 6, 2017). "After a natural disaster, some multi-level marketers profit handsomely off relief efforts". Pacific Standard. https://psmag.com/social-justice/after-a-natural-disaster-some-multi-level-marketers-profit-handsomely-off-relief-efforts. 

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