Jury Awards Fired Whistleblower More than $2 Million

Santa Ana, CA On May 1, the jury in Lawson v. PPG Industries, Inc. awarded Wally Lawson $20,000 in back pay and $2 million in noneconomic damages after he was fired for exposing corporate fraud at PPG Industries. His California labor lawsuit claims that he was fired after he called the company’s ethics hotline to expose a scheme to cheat the company’s customer, Lowe’s home improvement stores.

Jury Awards Fired Whistleblower More than Million Incidentally and along the way, he was also shorted on his own overtime wages in violation of the federal Fair Labor Standards Act (FLSA). PPG also allegedly failed to reimburse him for business expenses, including the cost of his home internet, which he used to do his job.

A casual observer might suspect a pattern.

How the fraud worked

Lawson worked for PPG Industries as a Territory Manager (TM), merchandizing PPG Industries’ architectural paint products in Lowe’s stores in Orange County. Sometime in the early summer of 2017, Clarence Moore, the Regional Manager to whom Lawson reported, directed Lawson and other TMs in his region to “mistint” gallons of PPG Industries’ “RescueIt” product at Lowe’s stores.

Like other paints, RescueIt is shipped to Lowe’s stores in a neutral-colored base formula and then tinted to the color of the customer’s preference using a tinting machine at the store’s paint counter. Moore reportedly suggested that the mistinting be done “on the down low.” He suggested that PPG employees could oversee the store’s paint counter while Lowe’s employees went on break—and to use that time to surreptitiously tint the paint. If Lowe’s employees asked about any of the products, Moore instructed the TMs to say the discounted paint came after a customer failed to pick up an order, according to Lawson’s complaint.

If a can of paint is accidentally tinted to the wrong color or a customer does not pick up an order, the tinted paint is placed on a clearance rack and sold at a deep discount—for pennies on the dollar.

According to an agreement between PPG Industries and Lowe’s, Lowe’s can demand that PPG Industries repurchase paint that is not sold within a certain period of time. If a gallon of paint is mistinted, however, it is considered sold to Lowe’s and PPG Industries cannot be forced to repurchase it.

RescueIt had suffered from declining sales because of problems with cracking, bubbling, and peeling. At the time Moore instructed his TMs to mistint paint, PPG Industries expected Lowe’s to ask the company to buy back unsold product.

Lawson refused to follow Moore’s directive. He called PPG’s ethics hotline to report the nefarious plan on April 18, 2017.

Trouble for Lawson

Shortly after Lawson reported the scam, he was interviewed by an investigator, David Duffy. On July 6, 2017, Moore instructed TMs to immediately stop mistinting RescueIt. Moore was, however, still Lawson’s supervisor.

On July 17 and again in August 2017, Moore filed newly negative performance evaluations for Lawson. These were not based on objective criteria. Moore also claimed that Lawson had falsified time records. Moore then fired Lawson on September 6. Lawson called HR and complained that he should have been protected as a whistleblower. He was abruptly rebuffed by the HR representative, who said that he did not want to hear about it and hung up.

California law protects whistleblowers

California Labor Code section 1102.5 prohibits employers from discharging, retaliating, or in any manner discriminating against an employee for disclosing information about a violation of state or federal law. That section of the Labor Code also prohibits employers from retaliating against a worker for refusing to participate in an activity that is against the law.

Federal law protects wage workers, too

Lawson typically worked 55 hours a week, but was discouraged by his regional managers, including Moore, from reporting more than forty-five hours per week. PPG’s willful failure to pay him for all the time he worked violated both the FLSA and the California Labor Code and entitled him to damages.

What can you do about wage theft, pressure to break the law and unjust termination?

Sadly, it’s not as uncommon as you might hope, and the laws do not enforce themselves. If this is the situation in which you find yourself, reach out to an experienced California labor attorney to find out what you can do.