In the fast-paced world of multi-level marketing (MLM), success stories often shine bright. But what happens when trust crumbles and promises break? That’s the tale of Brian Underwood, Michael Rutherford, and their company Pruvit. A recent court ruling exposed deep cracks in their partnership, leading to a big settlement and hard lessons for the industry.
Troy Dooly, the Beachside CEO and Editor of TalkGigs.News, broke it all down in a recent video. He’s known Underwood and Rutherford for nearly 20 years. Pruvit has been a client of his firm, too. Dooly calls it a classic case of miscommunication and lost trust. “This is exactly what happened,” he says. “Everything’s going great. You’ve got this giant team, and all of a sudden, it unravels.”
From Partners to Courtroom Foes
Rutherford was one of Pruvit’s originals—an “OG” as Dooly puts it. He and Underwood, the CEO, were best friends. They’d built businesses together through ups and downs. Pruvit, a network marketing company, gave Underwood a sweet deal: 25% of all revenue from the main account went straight to him.
Trouble brewed in July 2023. A dispute sparked lawsuits in Texas and Nevada. They settled quickly with a written deal. Rutherford agreed to step back—no more public talk, promotions, or social media posts about Pruvit. He had to unfriend non-personal recruits. In return, Pruvit promised to protect his downline (the team he built). No sneaky moves to shift people and cut his pay. His earnings were capped at $100,000 a month, with Underwood taking his 25% cut.
The deal also included a two-year no-solicit rule, confidentiality, and no bad-mouthing each other. There was even a “notice and cure” step—if someone slipped up, they’d get a warning to fix it.
But things fell apart fast. Rutherford said Pruvit broke the rules by tweaking the pay plan to slash his checks, letting his team leave, holding back payments without notice, and shutting down his account. Pruvit fired back, claiming Rutherford broke social media rules. The fight landed in court in February 2025 before Judge Rodney Mazant in Texas’s Eastern District.
The Judge’s Big Call
The court sided with Rutherford. By a “preponderance of proof,” Pruvit breached the deal. Key issues? They skipped commission payments, including bonuses from the ownership pool. Accounting was a mess—Rutherford had to beg for updates since he was cut off from the company. They axed his account without cause or the required warning period.
Pruvit’s claims against Rutherford? No solid proof. Their gripes about social media posts were “unsubstantiated or misinterpreted,” the judge ruled. Underwood wasn’t on the hook personally beyond his 25% share.
Rutherford showed real losses using records from iPayout, a payment service many MLMs use. The court awarded him $235,166 in damages, plus lawyer fees, post-judgment interest, and an order to restart his commissions through July 2026. Other claims, like fraud, weren’t tackled since they didn’t go to trial.
Dooly notes a twist: Pruvit’s lawyers drafted the deal, but left it fuzzy on purpose. “Legal teams write this in ambiguous language,” he says. “They made it so they could argue in court.” This time, it backfired. Courts are getting stricter on vague terms.
Lessons for MLM Bosses and Reps
This saga isn’t just gossip—it’s a wake-up call. Dooly has advice for company leaders:
- Write Clear Deals: Skip the wiggle room. Use simple, trust-based language. Define commissions, downlines, and payments upfront. “You’ve got to have clear terms to avoid all this,” Dooly warns.
- Follow the Rules: Stick to notice-and-cure steps. Don’t change pay plans on locked-out reps and expect them to hit new goals.
- Document Everything: Back up violations with hard evidence, not hunches. Reps are teaming up with law firms now, ready to fight back.
For distributors like Rutherford:
- Track Your Money: Check commissions often. Know your numbers cold.
- Stick to the Deal: Follow non-solicit rules to the letter. Dooly shares a tip: If you’re leaving a company, start fresh on social media. Block or unfriend as required—words like “unfriend” vs. “block” matter in court.
He points to a growing trend: More balance in MLM, like franchises or licenses, where both sides win. “Don’t let emotions cloud one-sided terms,” Dooly says. “Think about your rep and the company’s future.”
A Friendship’s Bitter End—and a Path Forward
At its core, this was about two friends hit by life’s storms. “Poor communication and broken trust,” Dooly sums up. “Just like in every relationship, if there’s a break, it’s tough to get it back.”
He urges everyone to build with purpose: Honest talk, walked-out values, no hypocrisy. Want to avoid the drama? Reach out for help, he says. His team keeps clients lawsuit-free and rep-happy.
The full 34-page settlement is public now. Dive in if you’re in compliance or legal. For the rest of us in network marketing? Act like it—build strong, stay true, and finish strong.
This story draws from Troy Dooly’s video analysis. TalkGigs.News will share the settlement docs soon for deeper reading.
