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Townsend v. Bayer Corporation

Reprinted with permission (December 2012 of the Arkansas Jury Verdict Reporter)

Employment Retaliation - A pharmaceutical sales representative was fired after citing fraud by a doctor – he alleged the firing was related to his speech – the company countered he was let go because he failed to properly maintain his company-issued credit card Townsend v. Bayer Corporation, 5:11-55 Plaintiff: Brian Reddick, Reddick Moss, Little Rock and Charles Banks, Banks Law Firm, Little Rock

Defense: Edwin L. Lowther, Jr., Wright Lindsey & Jennings, Little Rock and F. Joseph Nealon and Michael A. Graziano, Eckert Seamans Cherin & Mellott, Pittsburgh, PA
Verdict: $889,373 for plaintiff Court: Pine Bluff - Federal Judge: James M. Moody
Date: 11-2-12

Mike Townsend worked for Bayer Corporation as a pharmaceutical salesman. His territory covered the state of Arkansas. During the course of his tenure with Bayer, Townsend became concerned that an Ob-Gyn he called upon (Dr. Kelly Shrum) was buying cheaper non-FDA approved drugs and billing Medicare as if they were the more expensive version.

Townsend went to Bayer bigwigs and asked for guidance. He didn’t receive any help. Thereafter Townsend called an anonymous tipline operated by the Arkansas Attorney General to report Shrum. The tipline wasn’t very anonymous and before long a prosecutor demanded that Townsend be identified. His call resulted in an investigation that led to Shrum’s arrest, prosecution and conviction.

Thereafter Townsend found himself out of work. Bayer fired him in May of 2010. [He had made the anonymous phone call a year earlier.] Townsend believed the firing represented retaliation for his protected False Claims Act speech.

Why had Bayer moved against him? He theorized that Bayer cared about one thing and one thing only – increased sales. Anything that jeopardized that, the theory continued, was suspect, including reporting fraud by its customers. If Townsend prevailed he sought lost wages and non-economic damages.

Bayer defended the case and denied any retaliation. It cited that Townsend was let go because he failed to properly manage his company-issued credit card. The rules of the card (issued via U.S. Bank on behalf of Bayer) required Townsend to pay off his balance each month upon being reimbursed by Bayer. Townsend didn’t do this and U.S. Bank pulled his card.

Thus Bayer explained when Townsend no longer had a company credit card, he couldn’t pay for his expenses and entertain clients as his job required. Townsend thought the credit card excuse was a pretext, noting that the credit card continued to work after even he was fired.

December 2012

Bayer also sought to limit Townsend’s lost wage damages to August of 2012 – at this time it discovered so-called “inappropriate e-mails” and would have terminated him at that time regardless of prior events.

The jury’s verdict was for Townsend on the retaliation count. The jury also rejected Bayer’s affirmative defense (related to damages) about the after-acquired e- mails.

Turning to damages Townsend took $294,138 for lost wages before the e-mails (to August of 2012) and $27,235 more for after that period. His non-economic damages were $568,000, the verdict totaling $889,373. The court’s judgment totaled $1,470,962.92. This amount reflects the final judgment as well as attorneys’ fees and costs that were awarded.