We represented “Ellie” on retaliation claims against her employer after she blew the whistle on fraud attempts by high-level executives in the company.
Ellie worked for a food item production company for almost ten years. Throughout her time there, she was recognized by the company as an outstanding employee. She consistently received positive performance reviews along with retention bonuses and equity agreements, as the company valued her work so much that they wanted her to stay while the company grew. Before her termination, she was even selected for a leadership opportunity offered to less than 1% of the company staff. She was a very valued worker.
Around this time, the company signed a contract to provide food items to a grocery store. As the company tried to determine how to increase its profit margins and cut costs, the Chief Financial Officer (CFO) suggested that they use a different type of ingredient or add to their products lower quality ingredients without telling the grocery stores or consumers. Both of these suggestions were fraud, as they would violate the terms of their contract and lie to consumers. Ellie told the CFO that both ideas were wrong and illegal, but just a month later he called another meeting and brought up the suggestions again. He even accused other companies of doing the same thing, and when Ellie again explained that both suggestions were illegal and a breach of contract, he yelled at her.
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After this meeting, the CFO requested that Ellie test the ingredients of their competitors to see if they put lower quality items in their products without disclosing it to consumers. Ellie found no such ingredients in competitor packages and explained this to the CFO and her team. The company even ran an internal audit and researched their competitors across the country and found no evidence that other similar producers were fraudulently selling products with lower quality components.
Despite this, high-level executives in the company continued to push for fraudulent activity to increase their margins. They held a meeting to address profit margins, but this time they did not invite Ellie to attend. Instead, they found another employee who supported the illegal suggestions for boosting profit. However, when Ellie reached out to the financing team to explain that they had not developed a plan for increasing profit margins, the team members told Ellie that they had received company approval to add cheaper ingredients without telling the consumers or contracted companies.
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Ellie spoke to several other people in the company about the situation, and they all confirmed that it would be fraud to put different or lower-quality items into their products. Then, Ellie reached out to the team member who approved the addition of cheaper ingredients, and they explained that they approved the plan because they felt pressured to do so by company leadership. When another team member responsible for reviewing product recipes reached out to Ellie to ask if the new recipe using cheaper elements was allowed, Ellie told them that it was not. Coincidentally, Ellie was terminated from her position the next day. The only explanation that either she or her team received was that the company was trying to operate more quickly, but the termination was clearly in retaliation to her refusal to back down and approve the company’s fraud.
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We sent documentation of our retaliation claim and evidence to the company, explaining that they would lose a lawsuit brought on charges of retaliation. Though the company initially denied the alleged conduct and tried to argue that the suit couldn’t be brought or would fail, they eventually agreed to settle with us. The settlement agreement totaled $495,000.
Though we were shocked by the attempted actions of this company and its efforts to retaliate against Ellie for sticking to the law and her morals, we were honored to represent her.
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