Food and Beverage Employer Faces Federal FSMA Whistleblower Suit

Author: Marta Moakley, XpertHR Legal Editor

August 8, 2013

Employees are beginning to test the whistleblower provisions of the Food Safety Modernization Act (FSMA) in federal court. The FSMA, which was enacted in 2010 and seeks to limit foodborne illnesses to consumers, includes a whistleblower provision to ensure employee complaints of illegal or unsafe practices are properly addressed. +21 USCS § 2201 et seq. Even if an employee is unsuccessful in his or her FSMA whistleblower claim, the underlying complaint may lead to heightened federal agency enforcement efforts and investigations in this highly-regulated industry.

A former employee of Brothers International Food Corporation, a Rochester, NY-based supplier of bulk-packaged food ingredients, filed a lawsuit alleging violations of the FSMA's whistleblower provisions. Chase v. Brothers International Food Corp., No. 6:13-cv-06297 (W.D.N.Y. filed June 6, 2013). The former employee claims that he was terminated in retaliation for voicing concerns over the employer's practice of re-dating expired food products and targeting sales of those products to young children. However, the employer counters that the employee was fired for lawful reasons, and is maintaining a separate lawsuit claiming that the former employee stole confidential business information.

The FSMA contains strong protections for whistleblowers because of its focus on the prevention, rather than the containment, of foodborne illnesses. The Grocery Manufacturers Association (GMA), which represents the interests of the food and beverage industry, stated in a recent press release that the FSMA "represents the most comprehensive reform of our nation's food safety laws and regulations in more than 70 years." The Food and Drug Administration recently released two proposed rules addressing foreign supplier verification and the accreditation of third party auditors.

In addition to the whistleblower provisions of the FSMA, public corporations in the food and beverage industry must remain vigilant of whistleblower and associated liability under other applicable laws. For example, employers must ensure compliance with the Foreign Corrupt Practices Act (FCPA), which may trigger the whistleblower provisions of the Sarbanes-Oxley Act of 2002 (SOX) and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. In 2011, Tyson Foods paid $5 million to settle an SEC action and related criminal charges brought by the Department of Justice regarding alleged FCPA violations.

To that end, as this area continues to develop, employers should review their internal complaint procedures (especially if internal compliance programs are required by SOX) and provide adequate supervisor training regarding all applicable laws to avoid agency scrutiny as a result of an external whistleblower complaint.