Fiat Chrysler sales chief files whistleblower lawsuit against carmaker

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A senior Fiat Chrysler Automobiles executive has sued the carmaker for allegedly withholding his pay after he co-operated with a US federal investigation into its sales practices.

Reid Bigland, the company’s head of US sales and also its top executive in Canada, claimed in a whistleblower lawsuit that FCA punished him because he participated in a Securities and Exchange Commission investigation.

He claimed the company withheld bonuses and shares that accounted for about 90 per cent of his 2018 compensation and had attempted to scapegoat him, according to the lawsuit in federal court in Detroit.

The backdrop to the case is a controversy in 2016 when FCA was forced to revise five years of US monthly sales figures. Some US dealerships had sued the company claiming FCA had pushed them to submit false sales reports.

FCA disclosed an investigation by the SEC and the Department of Justice into its sales practices in 2016. It denied the claims by the dealerships at the time and said the revisions had not affected its quarterly financial statements.

In a statement on Wednesday, FCA said Mr Bigland’s eligibility for “incentive compensation” was subject to the board determining that he had satisfied the “applicable company and personal performance conditions”.

“Mr Bigland’s eligibility for his award remains subject to that determination and completion of a board-level evaluation of issues that are the subject to governmental investigations (as previously disclosed by FCA) in which FCA continues to co-operate. Beyond that, it would be inappropriate to comment on ongoing litigation or internal compensation processes,” the statement said.

The lawsuit by Mr Bigland alleged FCA had broken Michigan state laws designed to protect whistleblowers. The executive has worked for FCA and its predecessors since 1997, and is a member of its group executive council, a body of its top 20 senior most employees, according to the lawsuit.

Deborah Gordon, Mr Bigland’s lawyer in the case, told the Financial Times he was still working at the company. “He’s there, working extremely hard, every single day,” she said.

The claims were first filed in state court last month but were moved to federal court on Wednesday by FCA as it sought to compel Mr Bigland to privately resolve the dispute in arbitration.

“Although [the] plaintiff portrays himself as a ‘whistleblower’, he acknowledges in his complaint that defendants – not plaintiff – ‘self-reported’ the sales reporting issue to the SEC,” FCA said in its motion to move the lawsuit.

Mr Bigland told the SEC in January this year in a written submission that FCA’s sales methodology had been in place since the late 1980s, well before he became head of US sales, and that it was widely known within the company, including at the highest levels, this lawsuit alleged.

An internal FCA investigation in 2016 found no wrongdoing but the company had reported the matter to the SEC on the advice of outside counsel, the lawsuit added.

Mr Bigland “testified at length” over two days about the issue after the SEC requested to meet him, according to the suit, adding that in late 2018, the SEC suggested “he admit to some wrongdoing” as part of a resolution involving a penalty to be paid by FCA.

The SEC declined to comment.

FCA became aware of the “full scope” of his testimony to the SEC when he provided a draft copy of his submission before handing it to the securities regulator, Mr Bigland’s suit claims, and in March this year FCA informed him it would indefinitely defer his 2018 bonus and share payout.

Mr Bigland alleged the move was retaliation for his testimony and for his decision to sell his vested shares in the carmaker, which the lawsuit said “highly irritated” the company.