Geumsong Publishing Ordered to Correct Practice After Demanding Terminating Teachers 'Personally Visit All Members'

2024.07.31. The Fair Economy — The Fair Trade Commissio announced on the 31st that it has decided to impose corrective orders — including a cease-and-desist order and an order to revise or delete contract clauses — on Geumsong Publishing for imposing obligations that were, in effect, difficult for Purunet instructor-teachers facing contract termination to comply with, and for setting contract terms, when signing contracts with Purunet teachers, that allowed the company to arbitrarily change allowance payment standards and other core contract terms.

"Purunet" is the brand name of the home-study centers operated by Geumsong Publishing. Purunet teachers involved in operating the centers are divided into instructor-teachers and management teachers. Instructor-teachers are individual business operators who mainly handle member management and teaching services at Purunet centers while also handling the sale of study materials and the recruitment of center members; management teachers are individual business operators contracted to handle tasks such as selling Geumsong Publishing's products and recruiting Purunet center members and teachers.

According to the FTC, from March 2012 to the present, Geumsong Publishing has included a member handover clause in its contracts stating that "if a Purunet instructor-teacher wishes to terminate the contract, they must carry out the handover by visiting the homes of Purunet center members together with a replacement teacher designated by the company and obtaining the guardian's signature."

Although the method of handing over members should be one chosen to suit the circumstances of both the instructor-teacher and the members (parents/guardians), the company imposed an obligation that was practically difficult to comply with, requiring instructor-teachers facing contract termination to personally visit, together with a replacement teacher, the homes of every single member they had taught.

In addition, the contract stipulated that Geumsong Publishing could separately set or change contract terms not specified in the contract, while failing to specify in the contract the payment conditions for allowances and other core contract terms. As a result, there was a risk of disadvantage to teachers, such as arbitrary changes to allowance payment standards made without the teachers' consent.

The FTC determined that these actions by Geumsong Publishing constituted the unfair use of its superior bargaining position to disadvantage management teachers and instructor-teachers, in violation of Article 23(1) of the former Monopoly Regulation and Fair Trade Act, Article 45(1) of the Fair Trade Act, and Article 9(1) of the Act on Fairness in Agency Transactions, among other provisions.

The Fair Trade Commission said about this measure: "This is a case of sanctioning a study room business operator that unfairly used its transactional position to disadvantage study room teachers. It is significant in that it protects the rights and interests of study room teachers and raises awareness among suppliers (head offices) to comply with the law." It added, "We will continue to monitor to prevent recurrence of the same legal violations by study room business operators against study room teachers, and will strictly sanction any violations detected."