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Dealer agreement ethics

Discussion in 'Business of Diving Institute' started by CWC, Aug 10, 2019.

  1. CWC

    CWC Solo Diver

    # of Dives: 200 - 499
    Location: Arlington, TX
    I am a part-time scuba instructor at a local shop. I only do it for fun and because I enjoy it; I have a full-time “real job”. I have no experience on the retail and sales side of things. This week I unfortunately got a disappointing insight into some of the behind the scene workings of the dive industry. I am posting this because I am curious if what I experienced is the industry standard.

    I had purchased a BC from a well-known manufacturer. I quickly found that one specific claim they made about it on their website was not true. I pointed this out in a Facebook post. The manufacturer responded to my post and, surprisingly, directly admitted that what they had claimed was false. I expected that they would then apologize for the misleading claim and change the product information on their website. Nope.

    Instead, they dug through my Facebook profile until they found out I instruct for a shop that sells their products. They called the dive store sales manager and threatened to cancel their dealer agreement if the shop did not stop me from making any further comments online. The sales manager asked me to stop posting because it is a violation of the dealer agreement to have an employee saying negative things about a product.

    So, I am curious if it is normal for dealer agreements to prevent an instructor from expressing a negative opinion about equipment? Students and other non-professional divers put a lot of trust in the opinion of instructors. If it is normal for there to be behind the scenes agreements that prevent instructors from giving a true critique of a product, then I feel like this violates the trust that is put in us. What do you guys think?
    Schwob likes this.
  2. The Chairman

    The Chairman Chairman of the Board

    # of Dives: I just don't log dives
    Location: Cave Country!
    It shouldn't be, but often is. It's why we allow pseudonyms here on SB.
  3. JackOfDiamonds

    JackOfDiamonds Advanced Corn Hole Diver

    # of Dives: I'm a Fish!
    Location: The Holy Land
    Trying to justify and bully their lie through.

    Classic Corp.

    Personally i would had politely suggested that they can stick their agreement where the sun does not shine and be off my way looking for someplace else.
    lexvil likes this.
  4. Schwob

    Schwob Solo Diver

    # of Dives: 200 - 499
    Location: Illinois
    Thanks for posting. That explains a bunch!
  5. broncobowsher

    broncobowsher Solo Diver

    Change your status with the shop from "employee" to "contractor"

    I want to dig through your facebook profile jus to find what corporation I want to avoid. My soapbox lawyer says that they could be in for some ugly repercussions if they try to keep with there threat. They probably have gotten away with it a few times and think that is the standard response and it will work all the time. Not good business ethics at all. It may not be this incident, but that kind of practice will come around to bite them eventually.
  6. GrafCanuck

    GrafCanuck Barracuda

    # of Dives: 25 - 49
    Location: London, Ontario, Canada
    I have worked (volunteered) at a few dive shops and have seen the OEM/Distributor contracts. They all cite that the dealer cannot advertise for less than MSRP. I do not recall in print anything about bad mouthing an OEM, but the reality is that they can make life difficult for the dive shop. Examples include out of stock, longer shipping times, and poorer customer/return service. Pricing/discounts is usually set based on annual sales. I'm not a lawyer but defamation of anything online is a choice but with consequences. I'd question the OEM that you are dealing with as it doesn't sound professional but as broncobowsher says they have likely have gotten away with similar behaviour. If a diver's safety is at risk then shame on the OEM.
    outofofficebrb likes this.
  7. JackOfDiamonds

    JackOfDiamonds Advanced Corn Hole Diver

    # of Dives: I'm a Fish!
    Location: The Holy Land
    Its not defamation if the claims are true and according to what OP says the OEM even admitted it
    wetb4igetinthewater likes this.
  8. outofofficebrb

    outofofficebrb HARRO HUNNAYYY

    # of Dives: 200 - 499
    Location: San Francisco, California
    I'm following this thread and the replies closely as I work with vendors regularly, but not in the dive industry. (I work in the outdoor retail industry.) My experience is what @GrafCanuck describes in that industry but I am curious if the dive industry is any different.
    Darcy Kieran likes this.
  9. Darcy Kieran

    Darcy Kieran Business of Diving Institute

    What @GrafCanuck said is right on. Of course, most of the actions he described may also be illegal but how could you prove it? And, as a small business, how could you even afford the legal fees? Besides, having a litigious relationship with a key supplier may not be the best business tactic.

    I operated a dive store in Canada for a while. It was illegal for my suppliers to enforce MAP pricing in that country. Yet, every dealer was respecting MAP (most of the time) because of the reason above.

    Side comment: The local dive shop is currently at the heart of the dive industry. Yet, it is in a very weak position vs. its suppliers. The training agencies and dive gear manufacturers can pretty easily dictate what they want because they hold the big end of the stick. If they want to bully, they do. Size matters.

    Otherwise, I've seen such don't-talk-bad-about-me requests in many other industries. If I work for GM and I constantly states that I don't like their truck and I prefer Ford, then... I'm biting the hand that feeds me. I should go to work for Ford. If something is wrong, you should want to have it fixed - internally. It's called "washing its dirty linen in private". And even when you're gone, it's fairly common to have a non-disparagement clause in a separation agreement.

    What's unique in the dive industry is... Hobbyists. Most dive store owners and dive instructors are doing it 'for the fun of it'. Therefore, bringing in freedom-of-speech limitations doesn't sound acceptable. The 'hand that feeds me' doesn't really feed me!
  10. gwklein

    gwklein Instructor, Scuba

    # of Dives: 1,000 - 2,499
    Location: Atlanta
    It is not uncommon for employment contracts to contain a clause about not "disparaging" the employer similar to PADI's standards of conduct: "12. Not disparage the PADI organization, PADI Members or any other dive industry professionals." (I realize that employment contracts, dealer contracts, and standards of conduct are different but they are analogous.) For legal purposes in the U.S., the term "disparage" generally has a connotation of untruth involving libel or slander. It is also a general legal principle, that contract terms supporting an illegality such as false advertising are not enforceable. Without seeing the actual language of the dealer agreement and knowing in what state the contract is enforceable, it would be impossible to say with any certainty that the dealer agreement involves any of the principles.

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