Reid Bigland, head of U.S. sales for Fiat Chrysler Automobiles, filed a whistleblower lawsuit against the automaker Wednesday, claiming he has been a scapegoat for the company's sales practices being probed by federal officials.
In the suit, Bigland claims the company has retaliated against him for cooperating with a U.S. Securities and Exchange Commission investigation into FCA sales irregularities and slashed his pay by about 90 per cent, starting in March. The company plans to use any withheld compensation to pay penalties or settlements reached with the SEC, according to the lawsuit filed in Michigan's Oakland County Circuit Court.
The automaker's actions will cost Bigland about US$1.8 million, the lawsuit says.
Bigland, according to the suit, says he has cooperated with the SEC investigation, testifying "at length" about Fiat Chrysler's U.S. sales reporting practices, which he said long predated his appointment as U.S. sales chief in 2011, according to the lawsuit.
"In late 2018, presumably as a way to wrap up their investigation with some result, the SEC suggested to plaintiff that he admit to some wrongdoing as to defendants' monthly sales reporting," Deborah Gordon, Bigland's lawyer, wrote in the lawsuit. "The SEC also suggested a resolution involving some penalty to FCA. Because (Bigland) had not engaged in any wrongdoing, and there was no wrongdoing, he declined to do so."
In July 2016, FCA voluntarily changed the way it reports U.S. monthly sales and restated results for the previous five years to reflect the new methodology. The lawsuit says Bigland was excluded from the process of devising a new monthly sales reporting methodology, and was only advised that FCA was considering different methods to adopt.
The lawsuit was first reported by The Detroit News.
The SEC has been investigating the company's sales reporting practices before the company changed them. Bigland, a fitness buff and charismatic executive who pushes hard for results, is at the center of much of the probe to determine if the company has fraudulently hyped sales.
Fiat Chrysler in April settled an antitrust lawsuit filed by Napleton’s Arlington Heights Motors in Illinois that claimed the company pushed dealers to submit fraudulent sales.
In a statement Wednesday, Fiat Chrysler said long-term incentive payouts to executives are made at the discretion of a board committee.
Bigland's "eligibility for incentive compensation — like that of all corporate officers — is subject to a determination by the board of directors' compensation committee that he has satisfied the applicable company and personal performance conditions," FCA said in a statement. "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 cooperate."
The company said further it would be "inappropriate to comment on ongoing litigation or internal compensation processes."
According to Gordon, Bigland remains employed by the company.
Bigland’s participation in the SEC investigation, including a “white paper” he wrote detailing his knowledge of the automaker’s sales reporting methodology, has sparked retaliation from the company, Gordon said.
She described FCA’s decision to withhold a portion of his compensation as an “unusual situation” because of Bigland’s “excellent” performance that the lawsuit aims to reconcile.
“We’re hoping my client will receive the compensation he has earned and then some,” Gordon told Automotive News Wednesday. “It appears my client is being retaliated against.”