WASHINGTON (AP) — A Juul Labs executive who was fired earlier this year is alleging that the vaping company knowingly shipped 1 million tainted nicotine pods to customers.
The allegation comes in a lawsuit
filed Tuesday by lawyers representing Siddharth Breja, a one-time
finance executive at the e-cigarette maker. The suit claims that Breja
was terminated after opposing company practices, including shipping the
contaminated flavored pods and not listing expiration dates on Juul
The lawsuit does not specify the contamination issue or
how it occurred. Lawyers for Breja declined to elaborate on the issue
A Juul spokesman said in a statement that the claims
are “baseless” and that Breja was terminated because he failed to
“demonstrate the leadership qualities” required for the job.
the best-selling e-cigarette brand in the U.S., has been besieged by
criticism amid an explosion of underage vaping. The company faces
multiple investigations by federal and state officials as well as
lawsuits by families of teenagers who claim they became hooked on
nicotine through the company’s vapes.
Breja worked in Juul’s
global finance department less than 10 months. The lawsuit, filed in the
Northern District of California, seeks damages for lost salary, bonuses
and Juul stock, which it values at more than $10 million.
BuzzFeed News first reported the lawsuit.
describes a “reckless” and “win-at-all costs” culture at Juul,
primarily driven by the company’s former CEO, Kevin Burns, who was
replaced in a management shake-up last month.
Breja says he
learned in March that some batches of nicotine solution used in the
company’s mint pods had been contaminated. Breja claims that company
management shipped roughly one million pods affected by the issue and
failed to issue a recall or public announcement.
Juul’s spokesman rejected Breja’s account saying the company “determined the product met all applicable specifications.”
Breja protested the decision to ship the pods, the lawsuit alleges, his
supervisor at Juul reminded him that “stockholders would lose
significant personal wealth should he make his concerns public.”
lawsuit alleges that Burns “berated employees” to ramp up production of
mint-flavored pods, a move that “compromised quality control measures.”
The focus on mint came after the company voluntarily pulled its mango,
fruit and other candy-flavored pods out of retail stores, under pressure
from health authorities.
The lawsuit alleges that Juul’s outside
consultants assured the company that mint “given its fruity flavor,
would make up for any lack of sales of other flavored pods.”
need to have an IQ of 5 to know that when customers don’t find mango
they buy mint,” Burns told employees, according to the lawsuit.
claims he was wrongfully terminated the week after raising his concerns
about the contaminated mint pods. Because he had worked at the company
for less than a year he did not receive company stock that his lawyers
claim would be worth “eight figures at its current valuation.”
an earlier conflict with Juul management, Breja says he urged executives
to add expiration or “best by” dates to the flavored pods.
lawsuit claims Burns rejected the idea, stating: “Half our customers are
drunk and vaping like mo-fo’s, who the f— is going to notice the
quality of our pods.”
Juul’s website states that its pods are intended for use “soon after purchase.”
month Burns was replaced by K.C. Crosthwaite, a former executive for
Altria, the Big Tobacco firm that owns a 35% stake in privately held
In the last two years, the San Francisco company has become
the principal target of a nationwide backlash against e-cigarettes, with
parents, politicians and health advocates blaming the firm for the
recent vaping craze among young people.
According to the latest
government survey, more than 1 in 4 high school students reported using
e-cigarettes in the previous month, despite federal law banning sales to
those under 18.
In a separate health issue, federal officials are
investigating more than 1,600 cases of lung damage linked to vaping,
including nearly three dozen deaths. Many patients said they vaped THC,
marijuana’s intoxicating chemical, but officials have not yet implicated
any single product or ingredient.
Juul has made a series of
voluntary concessions in an effort to weather the firestorm. It’s halted
advertising and suspended sales of its fruit and dessert flavored pods.
The company continues to sell mint, menthol and tobacco flavors.
Trump administration announced plans last month to remove virtually all
vaping flavors from the market, leaving only tobacco.
health advocates are concerned the administration could back away from
its plan to ban mint and menthol, the most popular flavors among youth.
month more than 50 health groups, including the American Lung
Association and the American Academy of Pediatrics, sent a letter to
first lady Melania Trump urging the administration to follow through on
its initial proposal.
“If the goal is to remove the e-cigarettes
that are most attractive to youth, any proposal that ignores mint and
menthol flavors falls short,” the groups stated.
By Matthew Perrone