SPRINGVILLE — An injunction has been issued against the former owner of Neways International, who is accused of using inside information to help his family launch two competing multilevel marketing companies.
The May 25 injunction issued by U.S. District Judge Bruce S. Jenkins prohibits Thomas Mower Sr., Neways' former owner, and his two sons, Thomas Mower Jr. and Darick Mower, from using the company's product formulas, distributor lists and vendor lists to advance their new businesses, Sisel International LLC and SupraNaturals LLC.
Jenkins also ordered the Mowers to return any record of such information, including computer discs, to Neways, a cosmetics and health-supplement company that does business in more than two dozen countries.
All three companies rely on multilevel marketing to distribute personal care and nutritional products.
Neways filed a complaint May 23, accusing the Mowers of taking many of the company's trade secrets with them after selling Neways to Golden Gate Capital, a San Francisco-based equity firm, in 2006.
"They obtained a lot of money for those assets," said Neways spokesman James Watson. "It's like selling someone a car then going right on using it."
In a business that relies entirely on network sales, distributor lists are vital to a company's success, he said. Neways does not sell its products in stores, and distributors purchase exclusively from one company.
"By using those lists, they're stealing our sales force and our customers," Watson said.
Neways has already lost several distributors to the Mowers' new companies. Watson said. However, the legal battle is more about heading off future problems than retaliating.
"We respect competition," he said. "We think competition is healthy. What we don't respect is cheating."
Watson said there is a "path of evidence" indicating Thomas Mower Sr. planned to steal information even before he sold Neways or began serving a three-year prison sentence for tax evasion. The company would not disclose details about the evidence against the Mowers.
Watson called the injunction "a major win" for the company.
"It is the first solution to our problem," he said. "We are very happy the legal system is defending the integrity of our company and our agreements."
Sisel International and SupraNaturals declined comment.
Last year, Thomas E. Mower Sr. and his former wife, Leslie DeeAnn Mower, were sentenced to just under three years and just over two years, respectively, for cheating the Internal Revenue Service out of more than $1 million in taxes by failing to report the cashing of an estimated $3.2 million in overseas commission checks.
A federal jury found them guilty in March 2005 of one count of conspiracy to defraud and six counts of tax evasion.