CREDIT: Courtesy Andrea Sedlock

People who would never sneak into their neighbor’s house and take their television set often have no problems stealing creative work.That’s exactly what multi-level marketing company LuLaRoe did with artist Micklyn Le Feuvre’s designs.

According to Mommygyver, Le Feuvre learned of this when a LuLaRoe representative noticed that Le Feuvre’s name was on the pattern. This wasn’t because of some trendy desire for Le Feuvre to plaster her name all over her work–it’s because that name was a watermark on the online version. Le Feurver told me she isn’t entirely sure which website LuLaRoe used to take her design, but her designs are available to be licensed–without the watermark.

I reached out to LuLaRoe to answer the allegations made at Mommygyver and received the following response from LuLaRoe:

LuLaRoe respects the IP of artists and others. LuLaRoe does its best, given the large number of designs, to police its products to ensure no copying has occurred. When copying is found, the person responsible is disciplined and may even be terminated. These efforts are on-going.

It may seem ridiculous that LuLaRoe can’t ensure no copying occurs before they go to production, but they claim they make 400 new designs every single day. And this isn’t the first time LuLaRoe has been accused of stealing designs.

In January Balaz Solti, a Hungarian artist, filed a complaint in U.S. District Court alleging copyright infringement.

LuLaRoe is a billion dollar company, so there’s no excuse for not understanding how copyright law works, and firing and disciplining designers after the fact is not sufficient. They should be implementing checks before products are made.

In addition to copyright problems, LuLaRoe also has a staffing problem. While many clients (almost all women) are devoted fans and want to sell, the average rep earns $85 a year. Since their “sales force” of almost uncompensated women are independent contractors, they clearly should have the money to spend on proper designers.

This average figure doesn’t mean that some women don’t succeed as LuLaRoe representatives–some do. Business Insider reported last year that the top representatives earn 6 figure paychecks. However, that’s exactly how Multi-level marketing works: If you’re in at the beginning and build up a downline, you’ll do well, but the later you get in the game, the less money you are likely to earn.

However, Business Insider wrote a few weeks ago about reps who had “$8,000 worth of inventory sitting in my home while I was running up to food banks to feed my family.” What a difference a year makes!

LuLaRoe’s sales ranks have grown tremendously in the last few years–from about 2000 to 35,000 in a very short while. That’s too much for any one clothing manufacturer to absorb. If they had to pay all those reps minimum wage, they could never stay afloat, but since the average rep earns only $0.23 per day, it’s all good for the corporate office.

If LuLaRoe wants to stop the problems, they need to start with their people. Here’s what they need to do to fix this.

Slow Down Design

Yes, 400 designs a day mean that not a lot of anything is available ever, so if you see something you like, you better snag it now because it might not be available tomorrow. It’s been a good business model, but the amount of creativity it takes to maintain that level is obviously too high if designers have taken to stealing designs. It’s far better to have fewer designs that are legally obtained than it is to have more designs that you steal from artists.

CREDIT: Courtesy Andrea Sedlock

Slow Representative Growth

Any MLM company would balk at this. Sales rep growth is how they make money, but the problem is the people at the bottom can’t make any money. The market is saturated. Even if your designs are the best and your quality is perfect, the market is saturated and it’s dishonest to encourage new people to sign up when you know profitability is extremely unlikely.

Make Finding and Purchasing Designs Just as Important as Creating New Designs

Yes, you need to discipline and fire any designer that steals designs, but you also need to ask yourself what you’ve done to create an environment where that is acceptable? What have you done to create an environment where a designer doesn’t feel comfortable coming to her boss and saying, “I found this design on the internet. I think we should license it”? That needs to happen. If the goal is quality products, the person who created the design needs to be compensated properly. The person who found someone else’s designs should feel comfortable bringing it forward.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.