On March 21, Juul Labs, Inc. fired Siddharth Breja from his job as senior vice president for global finance. Now, Breja alleges that he was forced to leave Juul for urging the company to take action to protect the public from a contaminated batch of its own products. On November 5, Breja filed a wrongful termination lawsuit against Juul in federal court in San Francisco, the location of the company’s headquarters. According to the lawsuit, Breja discovered that Juul had sold its customers about 250,000 “mint refill kits” with contaminated and expired “e-juice,” the nicotine-based liquid that e-cigarettes burn to emit vapor.
Mint became a popular flavor for vaping enthusiasts when Juul stopped selling sweet-flavored products in an effort to prevent children and teenagers from smoking. Breja claims that the demand for mint-flavored “e-juice” was so high that Juul did not carefully monitor the quality of its e-juice supply. However, he has not specified what contaminated the refill kits. The 250,000 refill kits at issue could fill at least one million e-juice pods.
Breja explains in his lawsuit that he recommended as early as February that Juul label its products with expiration dates. However, former CEO Kevin Burns allegedly dismissed the idea that Juul customers would care whether the e-juice in their devices was past its prime. Burns denies Breja’s accusation of ignoring his concerns about product quality.
When Breja learned that Juul had shipped contaminated refill kits and expired pods to retailers, he urged the company to recall them and issue a health and safety notice. Instead, Juul tasked Breja with charging Alternative Liquids, Inc., the company’s supplier, for the problems with the e-juice. Breja was troubled by what he called the “hypocritical approach of not informing the customers about the contamination on one hand – claiming it was not a serious issue – and charging the supplier for it on the other hand.” One week later, Juul fired Breja under what he alleges were false pretenses in retaliation for his suggestions.
Breja also claims that Juul expected him and other company executives to refrain from keeping written documents about health or regulatory issues. He says this precaution was intended to prevent the DEA and the FBI from accessing information about the company from its internal records. The Food and Drug Administration, the Federal Trade Commission, several congressional committees, and five states are currently investigating Juul for marketing its products to adolescents. Juul is also facing multiple lawsuits for allegedly causing an outbreak of vaping-related respiratory illnesses, although most of these cases resulted from vaping with marijuana concentrates, not with a Juul device.
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A spokesman for Juul quickly denounced Breja’s lawsuit as frivolous, denying his reports about product contamination and his claim that Juul fired him for speaking up about it. “He was terminated in March 2019 because he failed to demonstrate the leadership qualities needed in his role,” spokesman Ted Kwong told several media outlets. “The allegations concerning safety issues with Juul products are equally meritless, and we already investigated the underlying manufacturing issue and determined the product met all applicable specifications.”
Kevin Burns also responded to Breja’s lawsuit by calling it “absolutely false and pure fiction” and insisting that he “had the company make huge investments in product quality” when he was CEO. Whether or not Breja’s claims are true or survive the scrutiny of a trial, they certainly pose a PR problem for Juul. In an attempt to revive the company’s image, new CEO K.C. Crosthwaite is restructuring the company’s leadership. Since Crosthwaite replaced Burns in September, Juul’s Chief Financial Officer and Chief Marketing Officer have both left the company. Crosthwaite has also begun the process of reducing Juul’s workforce by 10% to 15%.
Nathan Yerby is a writer and researcher. He is a graduate of the University of Central Florida.
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