- 17 -
its sales by manually recording them on a blackboard. None of the
JPMS staff knew how to use computers.
As of April 21, 1989, JPMS' products were formulated by
independent chemists and manufactured at independent laboratories.5
JPMS did not have the formulas for many of its products. Relying
on unrelated contract manufacturers to supply the products prior to
Mr. Mitchell's death, JPMS generally had no confidentiality
agreements with the contract manufacturers covering the proprietary
nature of the formulas.
Prior to Mr. Mitchell's death, JPMS was managed as a
partnership wherein each partner had a unique role. Mr. Mitchell's
strength was his artistry, creativity, and relationship with hair
stylists, and JPMS relied on his foresight and artistry to develop
products. Mr. DeJoria's strength was in sales, distribution, and
promotion.
Mr. DeJoria ran the daily operations at JPMS, making all
management decisions and having all managers reporting directly to
him (because JPMS had no middle management). Mr. Mitchell,
however, was the "senior partner", having the last word on all
5 From September 1983 through August 1988, Star
Laboratories of California (Star), an independent contract
manufacturer, produced most of JPMS' products. In August 1988,
JPMS' relationship with Star ended, and JPMS' manufacturing was
switched to Sun Laboratories (Sun). JPMS' relationship with Sun
was terminated in April 1989; thereafter, JPMS' manufacturer
became Bocchi Laboratories, a corporation in which Mr. DeJoria
was a 50-percent owner.
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