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Former Walmart Lawyer Says His Firing Was PunishmentLock Icon

8 min read

A former in-house attorney for Walmart Inc. said he knew in February 2017 that his career at the Bentonville retailer was coming to an end when he refused to make changes to a memo he had written years earlier about a bribery investigation in Mexico.

Shane Perry was right about his career with the Bentonville retailer. On July 6, 2017, the ethics and legal compliance attorney was “terminated in a ruthless fashion based on information carelessly gathered and processed at the orders of senior management for punishment and retaliation,” according to the lawsuit he filed last month in Benton County Circuit Court.

Perry, who worked for Walmart for 15 years, accused the company of manufacturing false charges against him — including child abuse — to justify firing him from his job, which paid $260,000 a year plus bonuses.

Walmart disagreed, and said Perry’s firing had nothing to do with its seven-year investigation into potential violations of the U.S. Foreign Corrupt Practices Act.

“Mr. Perry’s termination was due to violation of our ethics, discrimination and harassment policies,” Walmart spokesman Randy Hargrove said in an email statement to Arkansas Business. “The allegations are without merit and we will defend the company against the claims.”

Walmart’s attorneys also filed an emergency motion last month to have Perry’s complaint sealed.

It “contains significant and unnecessary references to the confidential and privileged information of Walmart, which Perry has an ongoing obligation to protect from public disclosure,” said Scott Jackson, an attorney in the Fayetteville office of Kutak Rock LLP.

Perry’s attorney, Robert Trammell of Little Rock, argued in his response that the complaint shouldn’t be sealed. Walmart didn’t point to any privileged or confidential information that was revealed in the complaint.

In his filing, Trammell said it was widely known that in June 2019 Walmart and its wholly owned Brazilian subsidiary, WMT Brasilia S.a.r.l., agreed to pay a combined $137 million to settle the Justice Department’s investigation into violations of the FCPA. WMT Brasilia pleaded guilty in connection with the settlement. And Walmart agreed to a $144 million settlement with the Securities & Exchange Commission.

Walmart’s motion to seal the Perry case was pending as of Thursday morning.

Perry’s complaint against Walmart for wrongful termination, negligence and outrage, as well as his divorce filing, provide a peek into Walmart’s FCPA investigation, an investigation first detailed in a New York Times story in 2012.

Going to Mexico

Perry graduated from the University of Mississippi in 1989, and then went to Samford University’s Cumberland School of Law in Birmingham, Alabama, to earn his law degree, according to his LinkedIn profile.

He became a licensed attorney in 1993. One of his early jobs was working for the Trammell Law Firm in Little Rock as an associate attorney. (Trammell now represents Perry in his suit against Walmart.) Perry also worked for the Arkansas Municipal League for seven years before joining Walmart in 2002.

In June 2011, he “was working on the global bribery matter where Walmart was accused of engaging in bribery to get stores built,” Perry said in June 2018 during his divorce proceeding, according to court records at the Arkansas Court of Appeals.

“I started out doing the legal work for that matter but realized I somehow ended up doing more compliance work than legal work. There is a fine line between the two.”

In November 2011, Perry went to Mexico City, “where he was met by top management of Walmart de Mexico, a wholly owned foreign corporation,” Perry’s lawsuit against the company said.

At the time, Walmart was expanding rapidly in Mexico.

On Nov. 17, 2011, at the end of a four-day investigation in Mexico, Perry wrote a report for Walmart, “as was his original charge to complete,” the suit said.

The report summarized what Perry had learned and referenced financial information from Walmart’s Mexican corporate records, the suit said.

“After the memo was transmitted to Walmart ‘corporate,’ there was no follow-up, debriefing, and no word was ever mentioned to the plaintiff about his Mexico City findings, for the next five … years,” the suit said.

Within months, though, allegations about foreign bribery would surface in an investigation by The New York Times.

New York Times Story

In early 2012, The Times published a story about allegations that Walmart had violated the FCPA, an anti-bribery law. The story alleged that Walmart bribed Mexican government officials when opening a store in Mexico.

“The intent was to simplify the process of building toward a store completion and shortening the time, by receiving favors purchased illicitly from the officials of a city or Mexican state,” Perry’s suit said. “Walmart’s Mexican management could short-circuit the construction time required, and avoid usual requirements of the applicable regulations of roads, environmental, planning, traffic control, or other necessary parts of regional government approval of new construction.”

Meanwhile, Perry continued his work on the FCPA matter. He was transferred to Mexico City in August 2014 to become the ethics officer for Walmart de Mexico.

“I ended up in Mexico because I was asked to go on expat assignment there,” Perry said at the 2018 divorce proceeding. “Initially, I asked to look at other countries but ultimately agreed to go to Mexico.”

His wife and four children went with him. They all returned to Bentonville in July 2016.

A Career in Jeopardy

Perry worked with the Department of Justice and the SEC on their investigation into Walmart’s alleged illegal activities in Mexico, and the investigation later expanded to Europe, Asia and South America, the suit said.

“That is when Mr. Perry became entwined in the allegations and denials between [Walmart] and U.S. government lawyers,” the suit said.

Perry’s 2011 Mexico memo “is alleged to have become a relevant topic” between Walmart’s outside lawyers and government attorneys. “The government’s lawyers were allegedly offended by the extent of the violations of law committed by [Walmart] as a regular practice while [Walmart] was aggressively bribing the city and state officials,” the suit said.

In 2016, settlement talks involved large fines and penalties.

Inside Walmart, the “FCPA matter” was the priority above all other legal issues in the company at that time, the suit said. Perry said he believed that “internal discussion about the contents of the Mexico Memo had been ongoing among high level executives, and possibly discussed” with members of the board.

The complaint does not reveal exactly what was in the memo.

In February 2017, Walmart’s defense lawyers called Perry to arrange an interview, the suit said. Perry agreed, and within 24 hours he was interviewed twice by five of Walmart’s defense lawyers about the 2011 memo.

Perry said they tried to make him alter the memo, which would reduce Walmart’s risk and liability in the bribery case. “Mr. Perry felt intimidated and threatened, even as a lawyer,” the suit said. “Perry refused to make changes in the Memo.”

Still, Perry said he knew his career was in jeopardy.

He said Walmart then “engaged in a retaliatory campaign to destroy” his career and community reputation. By damaging his reputation, Walmart could “diminish the credibility of the Mexico Memo he authored,” the suit said.

Termination

In May 2017, a senior vice president for Walmart filed a complaint with the company alleging that Perry “is making derogatory comments about women” and was treating a woman co-worker differently than he would treat a man, according to a confidential memorandum by Walmart that was included in Perry’s appeal of his divorce case at the Arkansas Court of Appeals.

In the course of investigating that complaint, according to the memorandum, “numerous other allegations against Perry were identified. The following allegations were substantiated against Shane Perry: Harassment-Gender, Race, Religion, Sexual, and Sexual Orientation.”

And “Intentional Dishonesty” was also substantiated, Walmart’s memo said. As a result, Perry was fired.

Perry had a different take on the events leading to his firing.

On June 22, 2017, Perry was suspended from Walmart. Perry didn’t know it at the time, but Walmart was interviewing “numerous people” looking for ‘dirt,’ complaints, and allegations,” the suit said. “The investigators created a slipshod investigation report layered with inaccuracies, untruthful statements and conclusions about Mr. Perry,” the lawsuit said.

He said that he was trying to help an employee improve her job performance and she falsely reported him for “inappropriate conduct.” Perry said that she filed the complaint as a preemptive strike to stop her firing.

Perry said the company also investigated his role as a parent.

Perry said he told a co-worker about using corporal punishment in 2013 on two of his four school-aged children because the boys lied about their use of an electronic tablet. When Walmart’s investigative report came out, according to Perry’s suit, it said that Perry was “beating” one of his children and “lost control.”

Perry said he was never questioned about the allegations, which he denies.

Making matters worse, after he was fired, Walmart reported allegations of child abuse of his children to the police and the Arkansas Department of Human Services. Both agencies investigated the allegations, but closed their investigations as unsubstantiated with no action taken. The prosecutor also declined to prosecute. Perry’s suit said that two Walmart employees who were interviewed by the police denied making statements attributed to them in the Walmart investigation.

(Perry also is acting as a representive of his four children in the case and alleged they suffered damages, including emotional distress, as a result of the police investigation into allegations of child abuse.)

Perry said in his 2018 divorce trial that Walmart told him he was being fired for harassment. “They never gave me more specific details,” he said. “I saw in the report that it mentioned dishonesty, but I was not told at the time I was being terminated for dishonesty. It was not true.”

After Perry was fired he said he didn’t earn an income until March 2018, when he went to work as city attorney for Pea Ridge (Benton County). He also is in private practice.

Perry also noted in the June 2018 divorce trial that he still had time to file a lawsuit in connection with his termination.

“I think that is something I will have to consider at some point,” Perry said.

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