Walmart Ex-Compliance Officer Sues Over FCPA Case

A Walmart compliance officer who helped to uncover the company’s FCPA scandal nine years ago has filed a lawsuit against the retailer, accusing executives there of firing him on trumped up charges because he refused to water down his report about the corruption he found.

Shane Perry, who worked for Walmart from 2002 until he was fired in 2017, filed his lawsuit in Arkansas circuit court last week. According to Perry’s complaint, in July 2011 Walmart assigned him to investigate allegations that executives in its Mexico business were bribing government officials there to secure necessary operating permits — allegations that, as history now knows, turned out to be true. 

In November of that year, Walmart sent Perry to Mexico for four days to investigate the allegations directly. On Nov. 17, 2011, Perry submitted a four-page memo to senior Walmart executives in Arkansas HQ. Perry’s lawsuit doesn’t outright say he confirmed FCPA violations in Mexico, but that same month Walmart formally disclosed in securities filings that an FCPA investigation was afoot. That was the first hint to the world that trouble was brewing. 

Compliance officers everywhere know the larger story. The New York Times subsequently published a front-page expose accusing Walmart of bribery in Mexico, which netted the newspaper a Pulitzer Prize. The Justice Department and Securities and Exchange Commission launched lengthy investigations that weren’t settled until 2019. Walmart overhauled its corporate ethics and compliance function under Jay Jorgensen, who did a commendable job and left the firm in 2018.

Perry tells a rather different story. He claims that after he sent that first memo to Walmart HQ in 2011, “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.”

During those five years Perry kept working on the FCPA investigation, and even served as corporate ethics officer for Walmart de Mexico from 2014 to 2016. He returned to corporate headquarters in Arkansas in 2016, where he continued working as a senior director in the ethics & compliance function into 2017.

2017, according to Perry, was the year everything fell apart. That February, Perry agreed to be interviewed by Walmart’s outside counsel handling the FCPA settlement talks. Perry’s lawsuit doesn’t specify exactly what those lawyers pressured him to do. The complaint only says this:

The purpose was a discussion about the content of the Mexico Memo, which Perry prepared over five years earlier during the mission to Mexico City. Perry felt intimidated and threatened, even as a lawyer. Perry refused to make changes in the memo…

Many executives related to the facts and topics of Walmart’s FCPA investigation are no longer employed by Walmart, their employment terminated with a quiet exit as reported by national media. The day he wrote the Mexico Memo, Perry contemplated the future possibility of a request for a change and its contents. 

OK, but to be clear — nowhere in these allegations does Perry expressly say Walmart executives or outside counsel asked him to alter his original Mexico Memo. He implies that point strongly, and the lawsuit does say Walmart “attempted to induce Mr. Perry to change a five-year-old memo to illegally, fraudulently, and unethically reduce the defendant’s risk and liability in the FCPA matter.” 

That’s as close as Perry gets to accusing Walmart of firing him for not watering down his findings. His lawsuit is heavy on implication and inference, but rather light on facts and detail. Let the reader beware.

Retaliation and Job Loss

So Perry met with Walmart’s lawyers in February 2017, felt intimidated and threatened, refused to change the contents of his Mexico Memo, and walked away feeling like he had a target on his back. 

According to Perry, the knife came that June. One of Walmart’s in-house lawyers interviewed him as part of an investigation into a separate matter — except the lawyer wouldn’t tell Perry what the investigation was about. 

“It was apparent that [the lawyer] knew the objective of the interview, but refused to confront and outline any specific allegations,” the lawsuit says. “When completed, Perry was clueless about what the investigation specifically involved.” Still, Perry was asked to turn in his Walmart ID and leave the premises that day, and the company fired him on July 6, 2017. 

The rest of Perry’s lawsuit suggests that this in-house investigation was related to HR, where Perry’s boss directed him to work closely with an under-performing employee. Except the employee knew she was likely to be fired, so she “falsely reported Perry for inappropriate conduct: it was her preemptive strike to stop the upcoming job termination.” 

That complaint from the under-performing employee drove the mystery investigation, which then became the pretext Walmart senior executives could use to fire Perry in retaliation for not watering down his Mexico Memo — that’s the story, as Perry tells it.

Walmart denies the accusations Perry raises, of course. In a statement given to the Arkansas Times — which, to give credit where it’s due, first reported the story of Perry’s lawsuit — Walmart said the following:

“Mr. Perry’s termination was due to violation of our ethics, discrimination and harassment policies and had nothing to do with his work on our seven-year FCPA Investigation. The allegations are without merit and we will defend the company against the claims.”

For whatever it’s worth, in Arkansas the statute of limitations for civil complaints is three years, which in Perry’s case is almost up: July 2017 to July 2020.