In a single year, the U.S. yoga industry generated more than $11 billion in revenue. Alo Yoga, a yoga apparel company, is one brand dominating the market. The company recently sued body positive yoga influencer Dana Falsetti (@nolatrees). The resulting backlash has raised questions about influencer relations and sponsored content ownership (influencer agreements and contracts).
For influencer marketing campaigns, brands and influencers collaborate to create sponsored content. Though this sponsored content is typically published on an influencer’s social channels, in some cases it may be difficult to discern who owns content once it goes live and afterward unless previously discussed and agreed upon contractually. To avoid ambiguity, brands and influencers should strive to reach a clear consensus and create documentation of who owns social media content before, during, and after campaigns.
Here we’ll outline the recent news surrounding Alo Yoga’s suit against Falsetti and examine its implications for the influencer industry.
Before diving into the Alo Yoga lawsuit against Falsetti it’s helpful to get a sense of the key players involved. Here’s a bit of background on the four main actors involved in the lawsuit and its subsequent fallout.
Alo Yoga: Founded in 2007, Alo Yoga is a Los Angeles based company that sells yoga apparel. The brand is extremely successful in the yoga market and in recent years has become especially well known for its social media presence and influencer partnerships. Its official @aloyoga Instagram account has 1.3 million followers. Celebrities among the likes of Kendall Jenner and Gigi Hadid are also regularly spotted wearing its leggings.
Cody Inc.: A digital fitness company that offers online fitness tutorials and classes of all types, notably yoga, that was acquired by Alo Yoga in December 2017.
Dana Falsetti: Falsetti is a 24-year-old body positive yoga teacher with 326,000 Instagram followers. She has created yoga tutorials and courses for Cody Inc.’s website and is the influencer who was sued by both Cody Inc. and Alo Yoga.
Kino Macgregor: Though not directly involved in either lawsuit, Macgregor (@kinoyoga) is a yoga influencer who has become an outspoken supporter and advocate of Falsetti in the months following Cody Inc. and Alo Yoga’s decisions to sue Falsetti. Macgregor maintains 1.1 million Instagram followers. She has also previously partnered with both Cody Inc. and Alo Yoga.
December 6, 2017: Cody Inc. sues Dana Falsetti in Washington state for breach of written contract and trade libel. According to Cody Inc., Falsetti announced that the company was being acquired by Alo Yoga in an Instagram Story before the information was publicly available. Falsetti’s Instagram Story reportedly forced Cody Inc. to announce the acquisition sooner than intended.
December 7, 2017: Cody Inc. officially announces that it’s been acquired by Alo Yoga via its company blog. According to Cody Inc. co-founder Paul Javid, as a result of the acquisition, all the content on Cody Inc.’s website is now owned by Alo Yoga.
December 8, 2017: A day after Cody Inc.’s announces its acquisition, Alo Yoga sues Falsetti in the state of California for defamation because of statements made in her Instagram Story that “there are sexual harassment/assault allegations against one of the owners (multiple counts)” of Alo, and that Alo “lies.” According to the suit, Falsetti’s allegedly defamatory statements in her Instagram Story have damaged Alo’s business.
March 13, 2017: Three months after the beginning of both lawsuits, Kino Macgregor creates a GoFundMe page to help Falsetti fund her legal expenses. To date, the fundraiser has raised more than $47,000 of its $50,000 goal. A change.org petition asked signatories to demand that Alo Yoga cease both lawsuits against Falsetti. The petition has accrued 11,200 signatures out of 15,000 (as of this posts publishing, April 9, 2018).
March 16, 2018: Three days after starting the GoFundMe campaign in support of Falsetti, Macgregor publishes an Instagram post and an Elephant Journal article entitled, “When one Big Company Picks on one Yoga Teacher,” bringing new attention to the lawsuit. The article has been viewed more than 333,000 times.
In the article, Macgregor states that Falsetti resisted Alo Yoga’s acquisition of the content she created for Cody Inc. due to, “…Alo Yoga’s large commercial presence, marketing campaigns featuring the thin and athletic elite, and the modus operandi of this business.” Macgregor also says that Falsetti is no longer able to afford her legal expenses and provides a link to the GoFundMe page.
In the second portion of the article, Macgregor discusses her own history with Alo Yoga. She previously had a contract with the company and felt bullied by its co-owner Danny Harris. Macgregor also claims that when Cody Inc. was relaunched as an Alo Yoga subscription service after the acquisition, her payment terms were changed. Similar to Falsetti, she expresses frustration that her content made on Cody Inc. is now owned by Alo Yoga against her will.
March 18, 2018: Two days later, Paul Javid, one of the founders of Cody Inc. publishes an Elephant Journal article entitled, “The Truth Behind Kino’s Letter,” in response to Macgregor’s article. He claims that after Macgregor severed ties with Cody Inc. she started competing with the company and stealing core elements of its website. He also says that Cody Inc. owns the content made with Macgregor and isn’t contractually obligated to remove the content from its website.
March 21, 2018: Macgregor posts a second Elephant Journal article entitled, “Alo, do the Right Thing and We Will All Thank You,” urging Alo Yoga and Cody Inc. to drop both lawsuits.
March 24, 2018: Macgregor announces that her Instagram account, and Falsetti and fellow yoga influencer Mabel Butler’s (@inversionjunkie) Instagram accounts were frozen for the span of a few hours.
No news has surfaced indicating that Cody Inc. or Alo Yoga plan to drop the suits against Falsetti. The lawsuits and subsequent fall out do demonstrate the importance of well-communicated influencer contracts that clearly define who owns sponsored content, and how each party can use the content, and on what platforms.
Brands need to prepare for all possible scenarios when writing an influencer contract and clearly communicate the terms of content ownership verbally and in writing — if not to foster positive influencer relationships, then to avoid a PR fallout or potential lawsuit.
From an influencer perspective, the controversy brings to mind the problematic relationship history between YouTube influencers and YouTube MCNs. In the past, influencers have been dismayed by MCN contracts that limit or appropriate their intellectual property rights. Others have been ensnared by contract clauses that make it challenging or close to impossible to leave an MCN after signing. Influencers should therefore also be cautious when signing influencer agreements, and clarify terms of sponsored content ownership before signing.
Related Post: YouTube MCNs: Where Are They Now?