Ecolab, the hygiene company backed by Bill Gates, last year praised the “integrity” of an executive who resigned over an alleged compliance violation and later fired two employees who reported the misconduct internally, the Financial Times can reveal.
The compliance saga, which took place in a German US office of the $50 billion company, reveals the pitfalls for multinationals of potentially failed compliance investigations.
Based in St. Paul, Minnesota, Ecolab employs 47,000 people worldwide and generates $13 billion in annual sales by providing water purification, sanitation and pest control services.
Cascade Investment, Bill Gates’ family office, is the company’s largest shareholder with 10.7 percent. The Bill & Melinda Gates Foundation Trust owns another 1.5 percent of the group.
In April 2021, its compliance team found that a manager in Germany had violated the company’s code of conduct, according to Ecolab.
The individual, who is not named for legal reasons, was found to have leaked confidential and sensitive customer data from two key competitors to colleagues via business emails.
The extensive data included multiple customer lists, contracts with customers and information about the revenue competitors made from their individual customers, including a US Army base in Germany, people familiar with the case said.
One of the competitor’s customer lists related to many hygiene issues in certain supermarkets, restaurants and bakeries across Germany.
Ecolab’s Code requires employees to “understand what is ethical and unethical, or legal and illegal when collecting and using commercial information” and that they “avoid any improper or illegal means of gathering information about competitors or customers.” .
The company said in a statement, “We can confirm that when the matter was raised in April 2021, it was immediately investigated by our compliance department and an Ecolab employee left the company shortly thereafter.”
It added that it did not pay that employee severance pay as a “violation”. [of the code of conduct] founded” and the manager left “shortly afterwards by mutual agreement”.
Three months after filing the compliance complaints, Ecolab fired the two whistleblowers, arguing that an internal restructuring had made their jobs obsolete.
At a court hearing in Frankfurt in February, one of the whistleblowers said the reorganization was just an excuse to fire him in retaliation for speaking out against superiors.
“They wanted to get rid of me because they saw me as someone who had soiled his own nest,” he told the judge, noting that just a month after the dismissal, Ecolab had posted a job advert that advertised a position which matched his own. An attorney for Ecolab disputed these arguments in court.
People familiar with the case said the two whistleblowers were the only employees who lost their jobs in the reorganization and that the company hired someone else for a similar job shortly thereafter.
However, one of the people added that five other employees left the company a few months later when a regional office was closed.
The chairman of the Frankfurt Labor Court said: “The connection [between the compliance case and the termination] seems questionable to me,” pointing out the sequence of events and noting that it is unreasonable to think that a company would fire employees for reporting misconduct.
Ecolab eventually settled both processes and paid the former employees approximately €45,000 in severance. As part of the settlement, the employees formally stated that none of their rights had been violated by the company.
The company said in a statement it has never, or will, “fired an employee for raising compliance-related concerns,” adding that the case in question is “a complex situation in which the motives of multiple individuals may not be immediately clear.” are”.
Ecolab declined to comment on whether it investigated how the data was obtained, whether other employees may have been involved, and whether it was ever used by its field force.
Marcel Leeser, a partner at Cologne law firm Hoecker, who is representing the manager who resigned after the compliance investigation over allegations of data misuse, said the departure was entirely voluntary and stressed his client had committed no wrongdoing.
The manager was later issued with a highly positive reference, specifically praising his “integrity” and stating that he had always done his job to Ecolab’s utmost satisfaction.
Ecolab said “we didn’t know” that such a cheap reference was issued.
“From what we know of the circumstances, we think it’s unfortunate and surprised that a reference has been provided,” the company said.
It added that “we believe it contains the language suggested by the ex-employee”. Leeser denied that his client was involved in the preparation of the report.
Cascade and the Bill & Melinda Gates Foundation declined to comment.
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