Whole Foods stores are packed with customers ahead of Christmas, but it has also been an eventful legal season for the chain in the Washington region, where nine managers were fired for allegedly stealing bonuses and at least two lawsuits were filed in recent weeks.
The company announced last week that nine D.C. area store managers were fired for allegedly tampering with store bonuses paid to employees. The managers, at stores in Maryland, Virginia and D.C., were fired for reportedly gaming the chain’s “gainsharing” program, which awards bonuses to employees whose departments come in under budget.
Then, on Tuesday, one current and one former employee of a D.C. Whole Foods filed a federal class-action lawsuit against the company, alleging it cheated them out of gainsharing bonuses.
The lawsuit, filed by a worker and a former worker at the Whole Foods on P Street Northwest in Washington, alleged the company avoided paying gainsharing bonuses by shifting labor costs to other departments, and that the practice was not limited to D.C., but existed nationwide.
Now, the nine fired managers are suing the grocery chain, alleging wrongful termination over gainsharing and defamation.
“Whole Foods, which touts itself as an employee friendly corporation, engaged in a nationwide practice to subvert earned employee bonuses,” says the lawsuit, filed in D.C. Superior Court. “When confronted with the systemic wage theft, Whole Foods attempted to cover up the corporate fraud and wage theft by terminating the nine whistleblower Plaintiffs.”
Whole Foods issued a short statement in response.
“These allegations are not consistent with the findings to date of our internal investigations and we will respond appropriately,” the statement said.
Since news of gainsharing problems broke, Whole Foods has said they were isolated to a small number of its 457 stores.
“We took swift action, but, relative to the rest of the company, this manipulation only happened in nine of our locations,” spokeswoman Brooke Buchanan said last week.
But in their suit, the former managers – at Whole Foods stores on P Street and in Arlington, Bethesda, Vienna, Gaithersburg, Reston, Columbia and Charlottesville – allege that shifting labor costs to avoid gainsharing payments is a “nation-wide, corporate practice” that “effectively stole the earned bonuses for countless employees across the country.”
“Whole Foods needed proverbial fall guys,” the suit states. ” . . . Whole Foods retaliated against Plaintiffs by wrongfully terminating all of them.”
The managers were fired on Dec. 1, with the lawsuit alleging defamation by Whole Foods because of subsequent stories by the Associated Press, ABC News and The Washington Post. Their suit asks for $20 million in punitive damages, among other relief.
In an email, Nadeem Sheikh, a plaintiff who was a manager at Reston’s Whole Foods, said he worked for the company for 12 years, and that shifting labor costs occurred during that entire period “at most, if not all, Whole Foods stores.”
“This is devastating to me and my family,” he wrote. “I dedicated my career to Whole Foods. I gave everything I had to the company. I never received a single corrective action or any discipline . . . That all changed when I complained.”