According to an article in Business Insider:
Direct sales clothing brand LuLaRoe is no stranger to controversy. From torn leggings to salespeople who claim they were encouraged to incur massive debt, the company has struggled to maintain its emphasis on community and self-empowerment during a period of massive growth.
LuLaRoe is now facing a class-action lawsuit that alleges it misled its salespeople in what the plaintiffs are calling a “pyramid scheme.”
The suit, which has four plaintiffs from across the US, alleges that the company deceived salespeople — who are called “consultants” — by telling them they could return unsold inventory for a full refund if they decided to leave the company.
A sudden change to the policy in September lowered the promised refund from 100% to 90% of purchased inventory, with additional restrictions. According to Yahoo, many consultants said that they felt comfortable joining the company because of the buyback guarantee, thinking that they wouldn’t face financial stress if they weren’t able to sell as much clothing as they had hoped.
The plaintiffs allege that in changing the rule, the company misled consultants who thought they would still be able to sell clothing with the 100% buyback guarantee.
The suit was filed on October 13 in the US