Fired vendor in Rogers sues Southern Glazer’s for $30 million

by Paul Gatling (pgatling@nwabj.com) 3,799 views 

A former vendor for Florida-based Southern Glazer’s Wine & Spirits has filed a wrongful termination lawsuit against the mammoth liquor distributor for $30 million.

The 79-page lawsuit was filed Oct. 6 by Rogers attorney Marshall Ney with Friday, Eldredge & Clark on behalf of Jon Thompson of Rogers, formerly vice president of national accounts for Southern Glazer’s. The complaint was filed in Benton County Circuit Court but has since been removed to federal court in Fayetteville. Thompson is seeking $5 million in actual damages and $25 million in punitive damages.

According to the filing, Thompson uncovered and reported during the course of his employment “numerous illegal pricing practices that favored individual retailers, violated anti-kickback and commercial bribery laws and violated federal antitrust laws. These actions consistently increased the cost of goods for both Walmart and Sam’s Club, harmed their profitability, harmed their ability to compete in the free market and increased cost to customers.” Thompson was fired in June for his “unwillingness to engage” in those business practices, according to the filing.

The specific business practices, according to the suit, included preferential pricing, exclusives, credits, rebates, adjustments and “collusion with [Southern Glazer’s] competitors in both pricing and non-pricing practices.”

Thompson worked as a supplier focusing on Walmart since 2005, according to the complaint, and first became employed in the alcoholic beverages industry in 2008. He worked for MillerCoors before being hired by Glazer’s in 2011 as vice president of national accounts. He kept the title after Glazer’s merged with Southern Wine & Spirits of America Inc. in January 2016, at which time he became lead account manager for Walmart and Sam’s Club. He kept those responsibilities until his termination.

Thompson’s lawsuit also claims Southern Glazer’s has “aggressively” interfered in his pursuit of finding another job in the alcohol and beverage industry. Thompson’s LinkedIn page says he is co-founder of STX Business Solutions in Bentonville, providing technology and insights for the complex and highly regulated adult beverage industry. The start date is September 2017.

SIMILAR SUIT
Thompson’s lawsuit echoes a class action lawsuit brought in federal court in July against Southern Glazer’s by a former restaurateur in California, also alleging a variety of fraudulent business practices regarding its sales and distribution scheme.

Also in July, Southern Glazer’s avoided federal prosecution by accepting a $5 million penalty for its business practices with the Pennsylvania Liquor Control Board (PLCB). According to court documents, the U.S. Attorney’s Office for the Middle District of Pennsylvania said employees at Southern Glazer’s provided cash, all-expense paid trips, tickets to shows and sporting events, entertainment and other items of value to officials at the PLCB from 2000 to 2012.

In a statement provided to Talk Business & Politics-Northwest Arkansas Business Journal, Ney said Thompson’s termination and the necessity of the lawsuit were unfortunate.

“Jon believes he simply was trying to do the right thing by refusing to participate in conduct that he views consistently with what’s alleged in a recent national class action against [Southern Glazer’s] in California based on unfair, unlawful, deceptive and fraudulent business practices, and also the allegations underlying a recent $5 million penalty against SGWS in Pennsylvania,” he said. “It’s an issue of integrity. Jon simply could not, in good conscience, turn a blind eye to what he perceived as pricing preferences and collusive discussions. He complained, he was admonished not to put his concerns in writing, and then he was terminated. Since that time, he’s been run through the mud and lost a few friends who didn’t realize [perhaps until now] that he was just trying to protect them.”

Southern Glazer’s is represented by attorney Charles L. “Chip” Babcock, a partner with Texas-based law firm Jackson Walker.

“We deny these allegations and we are going to vigorously defend this case,” Babcock told Talk Business & Politics-Northwest Arkansas Business Journal. “Mr. Thompson alleges there was inappropriate conduct that he had knowledge of for nearly seven years. Only now that he has been terminated has it turned into a lawsuit.

“Southern Glazer’s denies the improper conduct, and will thoroughly investigate the allegations in the lawsuit.”

Southern Glazer’s is the largest wine and spirits distribution company in North America, distributing more than 150 million cases of product every year. Forbes magazine lists Southern Glazer’s as the 17th largest private company in the United States with 20,000 employees and annual revenues estimated at $17 billion. It represents more than 5,000 brands of wines and spirits, including numerous well-known labels like Absolut, Grey Goose, Patron, Bacardi, Tanqueray and Beefeater.

The company’s main office in Arkansas is in North Little Rock. It also has an office and distribution warehouse in Springdale west of Interstate 49.

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