Coke Settles Fraud Suit for $540,000

09 October 2003

Coca-Cola will pay $540,000 (€457,237; £324,963) to settle a lawsuit filed by ex-employee turned whistleblower Matthew Whitley.

A senior executive at the company’s fountains division until he was laid off early this year, Whitley launched the suit in May [WAMN: 21-May-03]. Among a host of accusations, he alleged that Coke overstated revenues and gross profits through manipulation of customer marketing allowances.

The suit has already caused considerable embarrassment to the beverage behemoth over the claim that its employees rigged a marketing test conducted with Burger King. After an internal investigation, Coke had to admit this allegation was true, prompting a payout of $21m to an irate BK [WAMN: 14-Aug-03].

However, Coke denies that it fired Whitley for raising concerns about the test, and last month a judge dismissed half the suit's claims [WAMN: 08-Sep-03].

Nevertheless, the drinks giant will pay Whitley $100,000 in cash, $140,000 in severance benefits and $300,000 to cover legal costs. In return, the ex-Coke employee will drop his lawsuit and agree never to seek another job at the firm.

The plaintiff initially claimed damages of $44.4m. Although the final payout is a fraction of this sum, Whitley argues he achieved his objectives.

"It's become increasingly clear to me that the company has taken seriously the issues I raised," he declared. "That's all I ever wanted."

Data sourced from: New York Times; additional content by WARC staff