Risk Management

Wal-Mart Whistle-blower Drops Lawsuit

Former executive still has a whistle-blower case pending before the Labor Department.
Stephen TaubDecember 1, 2006

A Wal-Mart whistle-blower has abruptly dropped a lawsuit against the world’s largest retailer. Jared Bowen, who claimed he was fired when he called attention to a fraud committed by former number-two Wal-Mart executive Tom Coughlin, decided to drop claims filed in state court that the retailer defamed him when it accused him of helping his former boss defraud the company, according to the Associated Press. Bowen’s attorney Jim Lingle told the wire service his client “wanted to get on with his life.”

Wal-Mart had accused Bowen of helping Coughlin defraud the company of $500,000. Coughlin has already pleaded guilty to tax evasion and wire-fraud charges and was sentenced to five years’ probation and placed on home detention for 27 months, the AP noted.

In an October 30 court filing, Wal-Mart included a letter from a grand jury that informed Bowen that he may be charged in the fraud case, and asked that the case be dismissed, said the AP. The letter was provided by Steve Kardell, another Bowen attorney, as part of the evidence-gathering process. However, Lingle denied that Bowen dropped the suit because of the letter. “That had nothing to do with his dropping the case,” he reportedly told the AP, adding that the document is old.

Meanwhile, Bowen still has a whistle-blower complaint pending before the U.S. Labor Department that was filed under the Sarbanes-Oxley Act. According to the wire service, Wal-Mart spokesman John Simley commented: “Mr. Bowen’s decision to dismiss the case is consistent with our position from the very beginning that we didn’t defame Mr. Bowen and that his lawsuit was completely without merit.” The retailer has maintained that Bowen acted only when he believed he’d been caught, the AP noted.

In April 2005, CFO.com reported that Bowen claimed he was fired after reporting questionable payments approved by Coughlin, and asked federal prosecutors to investigate whether he should have been protected as a corporate whistle-blower under Section 806 of Sarbox. At the time, a copy of Bowen’s exit interview, obtained by The Wall Street Journal, asserted that the reason for Bowen’s firing was “loss of confidence in associate as a company officer.”

Bowen “is not a whistle-blower,” Mona Williams, vice president of corporate communications at Wal-Mart, told the paper at the time. She added that the company’s probe was started after another employee, who is still an employee “in good standing,” provided information linked to Coughlin’s use of gift cards. At the time, Kardell told Compliance Week that this was an unusual case because it didn’t involve shareholder fraud. Rather, it keys off another provision of Section 806 that protects individuals when there is possible mail or wire fraud. “This is a very clear-cut situation,” Kardell insisted at the time.