A former Juul executive has accused the San Francisco-based company of knowingly shipping out 1 million contaminated e-cigarette pods earlier this year. In a lawsuit filed in the U.S. District Court for the Northern District of California on Oct. 29, Siddharth Breja, a former senior vice president of global finance says he was fired after he raised concern about the contaminated shipping.
News reports say Breja filed the lawsuit on the same day Juul confirmed its plans to lay off about 500 people. The Associated Press reported that in the lawsuit Breja “seeks damages for lost salary, bonuses and Juul stock, which it values at more than $10 million.”
Juul Labs, valued at $38.5 billion, is a leading electronic cigarettes manufacturer with presence in over 10 countries and with more than 75 percent market share in the U.S.
Buzzfeed, who first broke the news, reported that according to the lawsuit, Breja, who worked in Juul’s global finance department for less than 10 months, had protested against the company’s decision in February this year to resell pods that were at that point almost a year old. News reports say that the lawsuit claims that Breja urged the company to at least include an expiration date or “best by” date, or a date of manufacture, on the packaging.
But the lawsuit adds that then-CEO Kevin Burns shot down that idea, saying, “Half our customers are drunk and vaping like mo-fos, who the f*** is going to notice the quality of our pods.”
However, according to BuzzFeed News, Burns denied making that statement. “I never said this, or anything remotely close to this, period,” the news report quoted him as saying through a representative. “As CEO, I had the company make huge investments in product quality and the facts will show this claim is absolutely false and pure fiction.” Burns was replaced by Altria executive K.C. Crosthwaite in September.
According to the lawsuit, Breja was terminated on March 21, just over a week after he raised concerns about the contaminated pods. According to news reports, Breja was told he was laid off because he had misrepresented himself as the chief financial officer at Uber. But Breja says in the lawsuit that he never made that claim, but had accurately stated that he was the chief financial officer of a division of Uber.
Juul’s claim is “preposterous” and “intentionally invented” to hurt Breja’s reputation and employment prospects, the lawsuit alleges.
Meanwhile, Breja’s attorney told BuzzFeed News that “Mr. Breja became aware of very concerning actions at the company, and he performed his duty to shareholders and to the board by reporting these issues internally. But he said, “In exchange for doing that, he was inappropriately terminated. This is very concerning, particularly since some of the issues he raised concerned matters of public safety.”
Meanwhile, a Juul spokesperson said that the company would “vigorously defend” against Breja’s “baseless” claims, adding that he was terminated “because he failed to demonstrate the leadership qualities needed in his role.”
But many believe that Breja’s claims come at a critical time for the company which is facing intense criticism for helping ignite an epidemic of youth vaping. The company also came under fire after it was reported that it directly pitched products to teens in school.
According to the Centers for Disease Control and Prevention, there have been 1,604 reported cases of vaping-related injuries in 49 states, including 34 deaths as of Oct. 22.
Prior to joining Juul, Breja was the CFO & Head of Strategy, Global Vehicle Solutions at Uber. Prior to that he was the Finance Head, Consumables at Amazon He’s also held positions at EBay and Capital One.
According to Breja’s LinkedIn profile, Breja completed his BA (Hons) in Mathematics from St. Stephen’s College in New Delhi and his MBA from The Ohio State Fischer College of Business. He also completed a course on Strategic Decision and Risk Management from Stanford University.