Vistage Lawsuit: Direct List, Rao, and Krupp Cases

A Vistage lawsuit typically arises in one of three patterns: a member accusing a Vistage chair of misusing confidential information, two members suing each other over dealings that began inside a peer group, or an employment dispute between Vistage and a chair. Across all three patterns, courts have generally declined to hold Vistage itself liable for the conduct of its members and chairs, relying on the organization’s confidentiality pledge disclaimer and its terms of use.¹

Direct List LLC v. Vistage International

The most extensively litigated case involving Vistage began when Eran Salu, CEO of Direct List LLC, joined Vistage in 2011 and paid roughly $1,300 per month for peer advisory and coaching. Over several years he shared proprietary business information and trade secrets with his Vistage chair, Phil Kessler.²

According to Salu, the relationship broke down in 2013 when Kessler asked for a 10% cut of profits from marketing work Direct List had done for Vistage, framing it as a referral fee. Salu refused. After Salu left Vistage in 2015, his entire five-person direct marketing team resigned and went to work for AVS Leads, a new company owned by Kessler and managed by Kessler’s daughter.²³

What Happened to the Claims Against Vistage

In September 2015, Direct List and Salu sued Vistage International, Phil Kessler, Lauren Kessler, and others in the Southern District of California, alleging fraud, breach of fiduciary duty, misappropriation of trade secrets, and unfair business practices.⁴

In February 2016, the court dismissed the breach of fiduciary duty claim without prejudice and let the fraud claim proceed. It also found that Salu personally lacked standing to bring the fraud claim, because he had not alleged an injury separate from his company. The unfair competition claim was rejected on the theory that Direct List’s request for injunctive relief rested on preventing harm to the general public, a theory eliminated by California’s Proposition 64.³ In November 2016, the court granted Vistage summary judgment on the remaining claims. The federal case was formally terminated in September 2018.⁴

The $2 Million Verdict Against the Chair

The claims against the Kesslers went to trial. A federal jury in San Diego awarded Direct List $2 million, finding the Kesslers liable for misappropriation of trade secrets, intentional and negligent interference with prospective economic advantage, and violations of the California Comprehensive Computer Data and Fraud Act.⁵

Salu also filed a separate lawsuit against Vistage in San Diego Superior Court alleging fraud, and Vistage filed a defamation countersuit over internet posts Salu had made about the company.⁵

Rao v. Anderson Ludgate Consulting

Vistage appeared as a third-party defendant in a New Jersey federal case where two Vistage members ended up on opposite sides of a business dispute. Prakash V. Rao alleged that Tricia Flanagan, CEO of Anderson Ludgate Consulting, failed to pay him under a profit-sharing agreement. Flanagan and her company filed a third-party complaint against Vistage, claiming it had breached its membership contract by failing to enforce an anti-solicitation provision and had negligently supervised its members.⁶

In February 2017, the court dismissed both claims with prejudice. On the contract claim, the court found no evidence any anti-solicitation provision existed, and noted that Vistage’s membership documents actually encouraged collaboration and business networking among members. On the negligent supervision claim, the court held that Vistage was not an employer and had no duty to monitor member-to-member solicitation, an activity it actively promoted.⁶

Flanagan also argued that Vistage had breached its confidentiality policy. The court rejected that theory too. The confidentiality provision required members to keep information from outsiders, and because the alleged disclosure occurred between two Vistage members, no breach had occurred.⁶

Krupp v. Vistage Worldwide

In August 2020, Marshall Krupp and The Coaching Symposium LLC filed a wrongful termination lawsuit against Vistage Worldwide and Vistage International in San Diego County Superior Court. Vistage filed a cross-complaint against Krupp and his company, and the docket reflects discovery disputes and a protective order over confidential information.⁷

The parties reached a conditional settlement in December 2022. In April 2023, Krupp filed a request for dismissal with prejudice covering both his amended complaint and Vistage’s cross-complaint, ending the litigation.⁷

Why Vistage Itself Rarely Ends Up Liable

A pattern runs through the case law: courts have been reluctant to hold Vistage responsible for what its members and chairs do with information shared in peer sessions. The New Jersey court found no duty to police member conduct. The California federal court granted Vistage dismissal and summary judgment on every claim brought against it directly, even as a jury later held the chair personally liable for $2 million.

Vistage’s own documents reinforce that line. Its confidentiality pledge requires members, chairs, speakers, and staff to keep group discussions confidential and prohibits using non-public information to compete with, solicit from, or cause economic loss to another member. The same pledge, however, states that Vistage “cannot control, monitor or be responsible for the conduct of members, Chairs or Speakers” and that disputes arising from pledge violations “shall remain between the disputing parties without liability to Vistage.” The pledge also warns that member discussions are not legally privileged, and that members could be compelled to testify about what was shared in meetings.¹

Vistage’s Terms of Use narrow exposure further. Total liability for any claim is capped at the amount a user paid in the six months before the claim arose, and Vistage disclaims all indirect, special, incidental, and consequential damages.⁸ For a member who believes information shared in a peer group has been misused, the practical takeaway from the case law is that recovery is likely to come from the individual chair or member who did the misusing, not from Vistage.

1
Vistage. Confidentiality Pledge and Standards
2
Bevel Law. Who Can a CEO Really Trust
3
GovInfo. Direct List LLC v. Vistage International, Case No. 15cv2025
4
CourtListener. Direct List LLC v. Vistage International Inc.
5
San Diego Business Journal. Peer Advising Dispute Leads to Lawsuits
6
GovInfo. Rao v. Anderson Ludgate Consulting, Civil Action No. 15-3126
7
UniCourt. Krupp vs. Vistage Worldwide Inc.
8
Vistage. Terms of Use