One of the most controversial Inc. 500 companies ever wins a legal battle.
An online nemesis has added another rancorous chapter to the history of International Profit Associates, whose 12 years as a fast-growing consultant to private companies have been marked by controversy. The former Inc. 500 company has been accused by some clients of poor service, high-pressure sales tactics, and aggressive bill collection. (See Inc.'s June 2000 issue, shown at right.) For much of 2003, a website called IPAopinions.com compiled links to unflattering news articles and a negative Better Business Bureau report. On Oct. 20, IPA, which is based in Buffalo Grove, Ill., filed suit. In federal court in Chicago, the company claimed that the site's operator, Cliff Brain, had violated trademark and libel laws and sought to stop him from using an IPA-denoted domain name.
Brain happens to be a former employee of IPA. Hired last spring, he first created an intranet site to keep up with members of his training class. But when he became disenchanted with IPA because of what he considered its mistreatment of customers and employees, he started a watchdog site on the Web "to lay it all out there so that [IPA] clients could make an informed decision."
Prior to a Dec. 22 hearing, however, Brain, who lives in Silver Spring, Md., opted to take down IPAopinions.com. Saddled with $30,000 in legal fees, he agreed to an out-of-court settlement with IPA, which has annual sales of $183 million, according to the company. IPA's managing director, John Burgess, who was to testify against Brain, is no stranger to courtrooms. The former lawyer was convicted of attempted grand larceny concerning a client's missing funds and disbarred in 1987.
While the suit against Brain ended in victory, IPA faces other challenges. The Illinois attorney general has received 96 complaints against IPA since 2000, says spokesperson Melissa Merz, who adds that IPA is under investigation. Likewise, the Better Business Bureau fielded 180 complaints in 2003. As a result, the bureau's Steve Bernas says it has classified IPA as having an "unsatisfactory record." An IPA spokesperson says that the company has achieved 100% "resolution" of complaints to the BBB, that all complaints against the company total less than half of 1% of its consulting clients, and that it is taking steps "to improve client satisfaction." But those who remain unhappy can still gather online. Since Brain killed his site, two copycats have sprung up to fill the void.