There is a problem with saying that distributors MUST do something. At that point, the manufacturer has put themselves into the hiring practices and if they don’t audit this, then they have DEFINITELY put themselves into a position of responsibility.
It is a Catch 22!!
I’m sure you’re right. However, I strongly suspect a manufacturer can impose a Code of Ethics on its distributors or even a list of things they will lose their distributorship for.
I’ve been a distributor in the past, and there was a long list of no-nos, including such things as poaching another distributor’s clients. It happened anyway, of course, but if caught you’d get kicked out. This was justified by the fact that unethical practice by a distributor would damage the brand, which it certainly would.
If a company doesn’t have such a policy, it’s pretty clear to me they either don’t care or are actually encouraging such behavior to make sales. I posted a link to thousands of complaints against Kirby upthread.