Fiat U.S. Sales Chief Sues Company in Whistle-Blower Lawsuit

(Bloomberg) -- Fiat Chrysler Automobiles NV’s U.S. sales chief has filed a lawsuit alleging the automaker withheld his pay in retaliation for cooperation with a federal investigation into auto-sales reporting practices.

Reid Bigland, who serves on the Group Executive Council, Fiat Chrysler’s highest-governing body, alleges the company withheld 90 percent of his 2018 pay package, according to a lawsuit filed Wednesday in U.S. federal court in Detroit. He claimed the move targeted his long-term incentive pay, including $1.8 million in special dividends.

Fiat Chrysler “self-reported” a sales-reporting issue to the Securities and Exchange Commission in 2016, according to the filing, and Bigland was compelled to testify by the commission, which he said wanted him to admit wrongdoing.

Bigland declined and provided the SEC with a document explaining the sales methodology had existed since the 1980s, and was well known by the late Chief Executive Officer Sergio Marchionne, according to the suit. Providing that documentation, along with his sale of company stock in 2018, sparked the retaliation, Bigland claims in the filing.

Fiat Chrysler said in a statement that compensation is set by its board of directors, and it declined to comment further. Bigland’s “eligibility for incentive compensation -- like that of all corporate officers -- is subject to a determination by the Board of Directors’ compensation committee that he has satisfied the applicable company and personal performance conditions,” Fiat Chrysler said in the statement.

The suit pits the automaker against its current head of sales in the U.S., its biggest and most profitable market. It comes as Fiat Chrysler’s proposed merger with Renault SA collapsed late Wednesday after Renault’s board failed to approve the deal and Fiat withdrew its offer.

Bigland, who joined the company in 2006, was widely viewed as a rising star after being appointed to head U.S. sales in 2011. But after the probe was disclosed, he kept a low profile and was not seen as a likely contender to replace Marchionne, who died last year. Most recently, he was appointed head of the Ram brand in 2018 by current CEO Mike Manley.

In April, Fiat Chrysler settled an antitrust lawsuit claiming the company pushed dealers to submit fraudulent sales numbers to prop up its stock price. The allegations spurred a federal investigation into whether the figures the carmaker filed with the SEC misled shareholders about its financial situation.

In the summer of 2016, at the recommendation of outside lawyers, Fiat Chrysler turned over to the SEC its methods of reporting monthly sales, according to the complaint. In July of 2016 the company changed how it reported monthly sales and restated those figures for the previous five years according to its new methodology, the lawsuit said.

In about May of 2017, the SEC started investigating Fiat Chrysler’s previous sales reporting practices, which Bigland testified about under oath for two days, according to his suit. Fiat Chrysler “was well aware that the SEC was looking into the pre-July 2016 monthly sales reporting methodology, and whether it had any improper impact on investors,” the suit said.

The Fiat Chrysler U.S. sales chief claimed that in late 2018 he resisted the SEC’s suggestion that he admit to wrongdoing about the reporting practices, according to the filing, and in early 2019 sent the agency the sales figures and methodology, along with an explanation of how he implemented sales practices that he inherited.

Bigland’s “unwillingness to act as a scapegoat for defendants’ 30-year practice which predated him, and his candor regarding defendants’ knowledge of this practice prior to and during his tenure as head of U.S. [sales] caused FCA to retaliate” by withholding his compensation, the suit said.

News of the suit was first reported earlier Wednesday by The Detroit News.

Bigland’s lawyer said the case was originally filed in Michigan state court on May 24 but was subsequently moved to federal court in Detroit.

The case is Bigland v. FCA North America Holdings LLC, 19-cv-11659, U.S. District Court for the Eastern District of Michigan (Detroit).

To contact the reporters on this story: Gabrielle Coppola in New York at gcoppola@bloomberg.net;Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net

To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Chester Dawson, Peter Blumberg

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