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Fired Coke Auditor Takes On Giant Corporation in Lawsuit

Matthew Whitley says he was dismissed after raising concerns about shady accounting and marketing practices.

September 22, 2003|Harry R. Weber | Associated Press

ATLANTA — Matthew Whitley wanted to work for Coca-Cola Co. so much that he submitted his resume 15 times. After being hired, the auditor and finance manager drank nothing but water and Coke and decorated a room in his house with company trinkets.

Eleven years later, Whitley is drinking only water. His wife sold the Coke plates, glasses and memorabilia at a garage sale. He is out of his $140,000-a-year job after accusing officials of the world's largest soft drink maker of shady accounting and fraudulent marketing practices.

Whitley, 37, was fired March 26, five days after sending his allegations to the company's top lawyer, although Coke said he was dismissed as part of a restructuring and not because he spoke up. The company said Whitley demanded $44.4 million from Coke in exchange for his silence but was refused. He is suing the company for unspecified damages, charging Coke with wrongful termination, fraud, slander and intentional infliction of emotional distress.

"I'm the last one who wanted any of this to happen," Whitley said. "I wanted somebody to take what I was saying seriously."

In some ways, he's gotten his wish. Federal prosecutors are conducting a criminal investigation of claims in his suit, including allegations that Coke rigged a marketing test of Frozen Coke, a slush drink, at Burger King restaurants in Virginia in 2000. Coke has offered to pay Burger King $21 million as part of an apology.

A Superior Court judge earlier this month dismissed more than half of Whitley's claims, including allegations that Atlanta-based Coke sought to hide fraud, but ruled that the lawsuit may continue. The suit also is filed in federal court; that case was not affected by the judge's decision.

E. Christopher Murray, an employment law expert in Garden City, N.Y., said the fact that the suit survived a motion to dismiss, even if it is a scaled-down version, is a victory for Whitley, who will now be able to take the depositions of Coke executives and obtain documents from the company. Most such cases are thrown out, Murray said.

Because the judge left intact Whitley's claims of intentional infliction of emotional distress and slander, he would be able to delve into the fraud allegations to show that Coke had a motive for its actions, Murray said.

But legal tactics Coke is likely to use could prolong the case, he said.

"With the larger companies, what they normally do is fight you tooth and nail, file thousands of discovery motions, put you through the wringer, until they wear you out," Murray said. "I'm sure that's what Coca-Cola will do."

Coke has denied most of the charges but conceded that some employees improperly influenced the marketing test.

Coke President Steve Heyer, general counsel Deval Patrick and Whitley's boss, Brian Hannafey, did not respond to several requests to be interviewed for this article.

Company spokesman Ben Deutsch said Whitley was let go as part of a company downsizing, not for blowing the whistle.

"He was one of approximately 1,000 employees separated from the company as a result of the North America integration," Deutsch said.

Paul Lapides, a corporate governance expert at Kennesaw State University in Georgia, said large companies such as Coke often have trouble dealing with whistle-blower claims. The lesson, he said, is to listen to your employees.

Lapides also said it was a mistake for Coke to fire Whitley. "Since internal auditors are there to find things that are wrong and suggest improvements, what Whitley found, he should have been thanked for."

Although Whitley stands to gain from his suit if he wins, he said it's not about money.

"That certainly wasn't my intent," he said. "If they'd done any kind of research into who I was, they'd find out that's not the case."

Thin, with close-cropped, light hair, Whitley shifted in his seat and his face twitched at times. He is more edgy these days and fears that someone is checking up on him. He says a high school buddy he hasn't spoken to in 15 years got a call from a man wanting to know about Whitley's background. Coke denies any knowledge of anyone checking up on Whitley.

At home in Dacula, a suburb 32 miles northeast of Atlanta, a neighbor described him as devoted to his community, helping to maintain the neighborhood pool and tennis court.

"They are the most normal family in the world," Laura Alston said. "It's almost shocking to see the things in the paper and it be your neighbor, because they are so normal. I think it takes a lot of courage to stand up to a big company."

Why would such a private man go public against a corporation like Coke?

"I've got friends who are still working there," Whitley said. "I felt like, as hokey as this sounds, I had a responsibility to them and to the shareholders of the company."

So why not go to prosecutors with what he knew before he was fired?

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