FCA lawyers say carmaker was right to withhold sales chief's pay
Fiat Chrysler Automobiles NV says it's withholding part of U.S. sales chief Reid Bigland's pay because he is implicated in an ongoing federal investigation into the automaker's sales reporting practices — not because he cooperated with Securities and Exchange Commission during its investigation into those sales practices.
In a motion filed Monday by FCA to block an amendment to Bigland's initial federal complaint, attorneys for the automaker outline why Bigland's pay was withheld earlier this year. The head of the automaker's Ram brand and U.S. sales, Bigland in June filed a federal whistleblower lawsuit that claimed he was made a scapegoat for the inflated vehicle sales practices under investigation by the federal government.
Bigland alleged FCA slashed his pay by more than 90%, which could cost him more than $1.8 million, because he cooperated with federal investigators. But lawyers for FCA wrote the company was entitled to withhold Bigland's bonus, stock payouts and special dividends because Bigland is accused of wrongdoing by the SEC in relation to the investigation. The Monday filing gives further insight into an ongoing federal investigation, and a rift between one of the company's top executives and his employer.
"Insinuating Reid is not entitled to protection is just incorrect," Bigland’s lawyer, Deborah Gordon, told The Detroit News. "They are just flatly incorrect."
The explanation for Bigland's pay change comes as FCA is trying to block an amendment to the initial complaint filed more than a month ago. At issue is a change to the original filing that would add a claim for violation of the whistleblower provision of the Sarbanes-Oxley Act of 2002.
The act specifically protects people who participated in an SEC investigation. If added, that claim would prevent Bigland's case from going to arbitration, effectively keeping it in the public eye in federal court.
Bigland says he has cooperated with the SEC investigation, testifying "at length" about Fiat Chrysler's sales reporting, which he says long predated his appointment as U.S. sales chief, according to the lawsuit. He has denied wrongdoing regarding the sales reporting practices, which were altered in 2016.
Bigland's compensation consists of a base salary and an annual bonus and stock payout that he typically receives in March. On March 8, Fiat Chrysler Global Human Resources Chief Linda Knoll told Bigland the stock payout and bonus were being withheld indefinitely, according to the original filing.
Fiat Chrysler executives “intend to withhold these payments … and instead offer them, in part, as fines or settlements to the SEC at (Bigland’s) direct expense, and/or to suggest to the SEC that they should be exonerated from further responsibility…,” Bigland’s lawyer wrote.
Bigland wants a judge to prohibit Fiat Chrysler from further wrongdoing or retaliation and is asking for an unspecified amount of damages.
Still, FCA said in the Monday filing that just because Bigland doesn't like the change to his pay doesn't mean it's an "adverse employment action," which he would be protected from under the Sarbanes-Oxley Act. Employees are not automatically entitled to bonuses, either. Withholding incentive compensation "is not an adverse employment action."
That Bigland is accused on misconduct by a government regulator is reason enough to withhold incentive pay, FCA lawyers wrote.