Whistleblower Case Alleges Fraud Against Wal-Mart

by Arkansas Business Staff  on Monday, Aug. 11, 2014 12:00 am  

A former executive of a personal care products company said she was canned for reporting an alleged fraud that her firm was committing against its biggest customer — Wal-Mart Stores Inc.

Barbara Laubenstein of Benton County unleashed her allegations in a complaint filed against her former employer, Conair Corp. of East Windsor, New Jersey.

She said in the complaint that she began working as vice president of sales for Conair’s Allegro Division in 2009. In 2012, the division sold $30 million worth of products to Wal-Mart. Conair also acts as an adviser to Wal-Mart and offers marketing and consumer business plans to the retailer.

Laubenstein said in the complaint that she discovered that Conair would “surreptitiously cover the UPC label of the old products with the UPC label of the current product and ship the old products” to Wal-Mart’s locations.

Conair “was able to unload its old, inferior inventory while charging Wal-Mart for the new, superior product,” she charged.

The lawsuit didn’t say when Laubenstein learned of the alleged misdeeds.

She said that when she sounded the alarm about the practice to her boss, she was fired. That was in July 2013.

Included in her claims against Conair is wrongful termination. She wants her old job back or an award for lost pay. She also is seeking an unspecified amount of damages.

John Feeney, Conair’s associate counsel, said the company doesn’t comment on pending litigation.

A Wal-Mart spokesman said in an email that the beef is between Conair and Laubenstein, “so we have nothing to add.”

 

 

Please read our comments policy before commenting.