NPA, Ex-CFO Weickert Exchange Unsavory Allegations In Legal Crossfire

In lawsuits pending in DC District Court, former NPA CFO Brent Weickert claims he was wrongfully terminated after raising concerns with the trade group's board about CEO Daniel Fabricant's conduct, while NPA is suing to remove board members who allegedly conspired with Weickert to oust Fabricant and serve their own personal interests.

Ten Natural Products Association board members conspired with former CFO Brent Weickert to oust NPA head Daniel Fabricant "for their own personal benefit and to indulge their personal whims," according to litigation the NPA has filed seeking to remove five individuals still on the board and recover for damages.

The trade group's complaint, filed Feb. 4 in US District Court for the District of Columbia, follows a complaint filed in California by Weickert against NPA and Fabricant in December, roughly one month after he was dismissed from the trade group.

Weickert is alleging wrongful termination and violations of the Federal Employment and Housing Act, which prohibits harassment and discrimination in employment, claiming among other things that CEO Fabricant charged improper expenses to the organization and created a hostile work environment.

His case has since been moved to DC District Court.

According to Weickert, who served as NPA's CFO and senior VP from 1997 until his dismissal, no reason was given for his termination. He claims he was sacked in connection with complaints he made in "a lengthy letter" to Roxanne Green, president of NPA's board of directors and an executive with the Seattle-area PCC Natural Markets chain, in May 2015.

In the letter, as detailed in the pending suit, Weickert described conduct on Fabricant's part that allegedly created a discriminatory, abusive and hostile work atmosphere and put employees at risk, in addition to misuse of funds and other practices that threatened NPA's standing.

Represented by Callahan, Thompson, Sherman & Caudill LLP in Irvine, Calif., Weickert seeks damages for loss of earnings and benefits, reputational harm and emotional distress.

Among Weickert's claims, Fabricant was charging expenses from "strip clubs" on the company credit card and writing large checks without informing Weickert or forwarding him invoices. He said Fabricant “entered into agreements without the required review, and required [Weickert] to pay invoices that went against the directions of the executive committee."

The former CFO also alleges sexual and religious harassment in the workplace and claims that he was subject to retaliation when he brought his concerns and other employees' complaints to Fabricant's attention, culminating eventually in his termination.

According to Weickert, Green acknowledged receipt of his letter and told him an investigation would take place based on information in the letter and other statements from the exec.

Richard Oparil of Porzio, Bromberg & Newman P.C. in Washington, who is representing NPA and Fabricant, said "outside counsel conducted a full inquiry into Mr. Weickert's allegations and the matter was concluded, months ago."

With regard to the suit, Fabricant and NPA deny the allegations, which the CEO characterized as "completely baseless and utter nonsense," adding: "We'll certainly defend ourselves and the organization in due course."

Green is similarly resolved. "We will vigorously defend the case and are confident we will prevail. We are well aware of this litigation. We have the utmost confidence in Dr. Fabricant and his ability to continue leading the organization which he has helped to expand, modernize, and strengthen the natural products industry,” she said in a statement.

NPA's attorneys have filed a motion to dismiss Weickert's complaint. If the motion is not approved, NPA will file an answer and assert counterclaims against Weickert "based in part on the factual allegations in NPA's suit against [current and former board members]," according to a spokesman for NPA.

Weickert is represented by attorneys Kathleen Hartman and Suren Weerasijriya of Callahan, Thompson, Sherman & Caudill LLP in Irvine, Calif. He seeks damages for loss of earnings and benefits, reputational harm and emotional distress.

NPA Alleges Conspiracy To Discredit, Dismiss CEO

NPA's suit paints a different picture of events over the past year and of Weickert's role, conduct and interests at the trade group leading up to his dismissal.

The trade group's complaint does not name Weickert as a defendant but links him to "wildly inappropriate and illegal behavior" since the spring of 2015 by 10 active and former NPA board members, including nine representing the retail sector, three or whom also are officers in the group's regional affiliates.

The voting component of NPA's 20-person board consists of 10 retail and 10 supplier representatives.

Board Members Named in NPA's Complaint

Remaining on the board:

• Carolyn Behrman, also an executive committee member, Natural Choices for Healthy Living Inc., Columbus, Ind.
• Donelson Caffery, Good Foods Grocery Inc., Richmond, Va.
• Claudia David-Roscoe, Health Foods by Claudia, Toledo, Ohio
• Stephen Distefano, Strictly Gluten Free, East Northport, N.Y.
• Frances Drennen, Manna Grocery & Deli, Tuscaloosa, Ala.
• Howard Pollack, Rainbow Acres Organic Groceries, Los Angeles, Calif.

Gone from the board:

• Robert Craven, CEO of [FoodState Inc.], Derry, N.H., a [Pharmavite LLC] subsidiary (resigned on Jan. 22)
• Ben Henderson, Bare Essentials Natural Market, Boone, N.C. (resigned on Feb. 1)
• Angie O'pry-Blades, Fiesta Nutrition Center Inc., Monroe, La. (term ended Dec. 31)
• Nicholas Pascoe, Bear Foods Natural Market & Café, Chelan, Wash. (term ended Dec. 31)

The six current and four former board members listed as defendants "colluded and conspired with a disgruntled, now former, employee of NPA," the trade group asserts in reference to Weickert. "By their bad faith actions, they intended to harm and tried to undermine NPA and force the termination of its new CEO/Executive Director, who was hired to reform and revitalize NPA."

Fabricant, who served as director of FDA's Division of Dietary Supplement Programs for more than three years, returned to helm NPA in April 2014 (Also see "People In Brief: Fabricant Named NPA Head; HHS Secretary Nominated" - HBW Insight, 21 Apr, 2014.). Prior to his stint at FDA, he was vice president for global government affairs at the natural products trade group.

His movement back and forth between industry and FDA was seen by some in the dietary supplement industry as posing concerning conflicts of interest (Also see "Trade Groups Dismiss Jarrow’s Criticism Of FDA’s Fabricant" - Pink Sheet, 5 Sep, 2011.).

According to the complaint, the defendants launched their "long-planned surprise attack" at an NPA board meeting in September 2015, where the nine members pushed for the board's executive committee, which has authority to appoint or dismiss the trade group's executive director/CEO, to remove Fabricant from the post.

At the September meeting, it "was clear from the discussion that a majority of the Executive Committee … would not support Fabricant's termination," and in December Green "ruled that such a motion [to dismiss Fabricant] would be improper for the Board to make and consider."

"Thus, the issue of Fabricant's continued employment at NPA has been conclusively resolved," NPA counsel Oparil states in the complaint.

Policy Changes Incited Sedition, NPA Suggests

As for motives, NPA says Fabricant's "efforts to revitalize NPA and support its supplier and retailer members" included putting the group "on a more secure financial footing" both by growing revenues and reducing expenses. Among implemented cuts, NPA stopped reimbursing some travel expenses for retail board members and increased the dues for all retail members of NPA, which were significantly lower than supplier members' dues.

"Some retail members of the Board of Directors, including Defendants, loudly opposed these changes, which would cause them to have to pay their own travel expenses and increased annual membership dues. Thus, they determined that Fabricant's changes would not be in their personal interest, while ignoring the interests of NPA," the complaint alleges.

For Weickert's part, NPA says the former exec did not agree with the organization's decision to hire Fabricant as executive director/CEO in 2014, and "he knew that NPA could contract with an outside firm to perform [his] functions at half the annual cost."

The group notes that in addition to the expense of retaining Weickert, allowing him to work from his home in California "was not necessarily efficient or prudent from a control and reporting standpoint."

In February 2015, Fabricant advised Weickert to "begin planning for a six- to 12-month transition plan to leave NPA" after Weickert's "deficient job performance" led to the loss of a $25,000 contribution to NPA's political action committee, NPA says.

"Weickert knew that if Fabricant's contract with NPA could be terminated, he would be in a position to keep his lucrative job or even become the new CEO/executive director," NPA alleges.

Additionally, Weickert admitted that he used reward points on an NPA credit card without authorization for personal gain, "including the purchase of an expensive telescope and a camera," the group alleges.

Further, NPA says, Weickert made payments for travel and other costs charged by board members that he was aware were inappropriate.

All such improprieties factored in NDA's decision to include Weickert among its cuts. At the same time, "Weickert knew that if Fabricant's contract with NPA could be terminated, he would be in a position to keep his lucrative job or even become the new CEO/executive director," according to NPA's complaint.

All said, the conspiring board members' "harassing and vexatious conduct has also diverted the attention of NPA and its staff from carrying out its corporate purposes."

NPA's complaint alleges violations for state and federal laws concerning breach of fiduciary duties, waste of corporate assets, tortious interference with business relations and economic advantage, and civil conspiracy.

In addition to removing the five active board members, the complaint seeks an order indemnifying NPA for any damages, costs and expenses linked to Weickert's complaint, compensatory damages in excess of $75,000 and "punitive and exemplary damages in the maximum amount allowed by law."

However the legal brawling plays out, NPA could face sharp industry scrutiny as it moves forward (Also see "Natural Products Association Could Face Scrutiny Amid Legal Battles" - HBW Insight, 11 Feb, 2016.).