by BETTER FARMING STAFF and SUSAN MANN
A former employee alleges that a Strathroy egg marketing company and others in the province’s egg industry used fraudulent practices that compromised producer profits and consumers’ food safety.
The sworn allegations, in court documents filed by London resident Norman Bourdeau, have not been proven in court and are vigorously denied by the organizations and individuals involved.
In a statement of claim filed Oct. 7, 2010 by L.H. Gray against Bourdeau, the company denies his allegations.
Bourdeau says he worked for L. H. Gray & Son for 15 years providing information technology services, including document management, communications, email and programming. He is in litigation with L.H. Gray. He also wants the Ontario Farm Products Marketing Commission to investigate his claims and hold a public inquiry. The Commission oversees Ontario's regulated farm marketing system.
L.H. Gray is the second largest egg producer, grader and marketer in Canada, Bourdeau notes in a Dec. 20, 2010, letter addressed to the Commission’s chair, Geri Kamenz.
In a phone interview Chief Financial Officer John Leitch told Better Farming that based on instructions from legal counsel he couldn’t comment specifically but said “L.H. Gray certainly denies all of the allegations that have been made. L.H. Gray certainly takes all of these allegations extremely seriously and we are prepared and will defend them very vigorously.”
In his submission to the Commission, Bourdeau refers to himself as “the Whistleblower” and alleges that his former employer illegally included about $150 million worth of cracked eggs into Grade A packages sold to retail, institutional and food service sectors.
The eggs pose health risks “since the potential for bacterial contamination from wash water entering cracked eggs is possible,” he states. Bourdeau alleges that Egg Farmers of Ontario “condoned this activity.” The marketing organization represents the province’s supply-managed egg producers.
Bourdeau further alleges that the company made false reports to the marketing organization and shared the proceeds of “fraudulent profit” with producers, including some with ties to Egg Farmers’ board and administration.
Kamenz acknowledges Bourdeau’s request for a public inquiry is "before the Commission." He declined comment on the allegations because the matter is before the courts. When asked if the commission would have to wait for the matter to go through the courts before dealing with the situation, Kamenz explained that it would be inappropriate for him to comment.
In October, 2010 L.H. Gray, Bourdeau’s former employer, initiated legal proceedings against him in a London Superior Court of Justice. Among its claims, the company lists breaches of contract, fiduciary duty, confidentiality and good faith obligations as well as intentional interference in economic relations. L.H. Gray is claiming $15 million in damages.
In court documents, the company alleges that Bourdeau signed a confidentiality agreement in 2009. It fired him in March 2010, alleging that Bourdeau had played a role in an ongoing legal action it faces from an industry competitor.
That company was Best Choice Eggs and its parent company Sweda Farms Ltd., which in 2009 filed a claim against Gray and Burnbrae Farms, alleging the two companies tried to sabotage its business by stealing customers and using confidential information and defamation. Sweda is claiming $16 million in damages.
On Feb. 12, 2010,Sweda also commenced an action against the Ontario Egg Producers (now known as Egg Farmers of Ontario), Mark Beaven, a former Egg Farmers operations manager, and Harry Pelissero, its general manager.
Beaven left that job in November 2008 and is now executive director of the Canadian Animal Health Coalition. He declined to comment on why he decided to leave.
Beaven explains that the suit against him concerned an investigation but says he has now been released from the court action by a so-called Mary Carter agreement. He referred any further questions to the Egg Farmers of Ontario lawyers, noting he is no longer with the marketing board.
Beaven says Bourdeau’s allegations are “very concerning to me for the possible damage that they can do to this industry.”
“If these allegations are true, it would potentially erode the public confidence in the system, which is unfortunate because the producers are excellent producers, they’re excellent farmers and the system itself is a very strong, it’s a great system, it ensures a top quality product for a reasonable price and that to me is a good thing.”
In court documents L.H. Gray alleges that information Bourdeau provided prompted a Superior Court Justice in Whitby to issue an ex parte order that would put data storage material and other documents in the hands of Sweda Farms. The Feb 12, 2010 order prohibited L.H. Gray from destroying or deleting business documents.
L.H. Gray also alleges that Bourdeau stole about one million confidential and commercially sensitive documents from the company and provided about 800 pages to Sweda Farms Ltd.’s owner, Svante Lind in 2009 and 2010.
In December, Bourdeau launched a counter action against L.H. Gray, company president Bill Gray, Scott Brookshaw, the company’s vice president of processing, and John Leitch, L.H. Gray’s chief financial officer, claiming $25 million in damages.
Bourdeau alleges company officials threatened to fire him if he did not sign a confidentiality agreement, wrongfully terminated his contract and diminished his business reputation through defamatory statements. He also alleges that in 2009, Bill Gray ordered him to delete more than 4,000 emails after being served with Sweda’s statement of claim.
Harry Pelissero, general manager of Egg Farmers of Ontario, says a Feb. 22 injunction granted by the court prohibits him from making detailed comments. The injunction seals some information in the court file because of its sensitivity.
Pelissero says what he can say is they’re aware of the package of material that was sent to the commission by a former L.H. Gray employee. He says Bourdeau sent the package and “we take the package seriously and we’re working co-operatively with the commission.”
Pelissero says they don’t know if the commission will launch an inquiry into Egg Farmers of Ontario.
Court documents indicate egg producers supplying L.H. Gray received copies of Bourdeau’s submission in February.
Producers are concerned about the impact the submission to the commission will have on supply management for the industry, alleges Brookshaw in an affidavit. “They are wondering whether this was an attempt to scare producers and is intended to threaten the industry. Others have questioned the integrity of L.H. Gray,” he alleges.
L.H. Gray and Bourdeau head back to Superior court in London March 1. BF
Egg case summary
Comments
In the most recent annual review of OFPMC as supervisor of the egg board, how would this kind of alleged transgressions be allowed to meet with no less than a satisfactory quarterly or annual report(s)?
In the real world all responsibility rests with the supervisor. In OFPMC supervisory capacity all reports are t heir's to freely review. With full knowledge to investigate and review. Was this responsibility ignored and if so by who?
If this was a health issue and if it had evolved into a Walkerton loss of life due to negligence what would the chain of accountability be? Would responsibility fall on everyone at OFPMC as well as the minister OFPMC reports to? And to cabinet that the minister reports to?
In it's supervisory role has OFPMC failed to report or investigate reported ongoing activities in over 2 yrs. If this is the case who should now investigate OFPMC, or will they be allowed to investigate their own hen-house?
Accountability must flow from the top down just as much as responsibility must flow from the bottom up. In most cases follow the money.
Fear not snooky
This is no Ehealth this is agriculture Gee golly shazam,,,,,,,
I think there are lots that remember a resolution PASSED at the corn wheat and beans AGM in 2008 calling for audits.
The last part of the resolution stated:
Therefore: let is be resolved that a operational and accountability audit of OFPMC (not limited to) be undertaken so as to determine the accountability of communication deficiencies as found by the Provincial Auditor that were not reported by regular ongoing audits of Agricorp or OFPMC and not communicated, reported, corrected or addressed by OFPMC or the minister and so to ensure that the legally required audits are peer reviewed as a substantive right to vindicate public interests.
Comment modified by editors for legal reasons
What are the odds that any farm organization now asks for acomplete audit of OMAFRA and OFPMC?
None ... their souls are owned by stable funding. Unless producers and paid members demand legal justice clearly and loudly in an election year nothing with change.
As has been said before this is not E-health or Walkerton and no one died...yet. Agriculture and it's minister are little more than the commenting agency for other ministries. As long as food is produced and farmers are doing the grunt work with their money ....it is all good
"Beaven left the job in November 2008 and is now executive director of the Canadian Animal Health Coalition".(bf)
Mary Carter agreement definition http://www.duhaime.org/LegalDictionary/M/MaryCarterAgreement.aspx
"Mary Carter agreement is one in which a co-defendant secretly agrees with the plaintiff that, if that defendant will defend himself in court, his own maximum liability will be proportionately lessened by increasing the other co- defendants' liability.
"Secrecy is the key to this type of arrangement,as the trier of facts, if so informed, would likely vary the credence given to the testimony and conduct of the signing defendant as it relates to the non-signing defendants.
"Additionally, by portraying a grim picture of the other defendants' misconduct or, sometimes, by admissions against himself and the other defendants, the cooperating co-defendant could lessen or dispose of his own liability via use of the secret Mary Carter agreement."
Who's legal signature signed this agreement and under what authority?
Comment modified by editors for legal reasons
The making of "false reports to the marketing organization and shared the proceeds of “fraudulent profit” (bf)are serious allegations.
..
Comment modified by editors for legal reasons.
Nobody in this sordid and sorry mess seems to be representing consumers, the people with the most at stake, and the people who should be calling the loudest for a public inquiry.
On the surface of things, there would appear to be way-more than enough guilt to go all around the table when it comes to not looking out for the consumer. Why not teach the entire egg industry a much-needed lesson on public responsibility by shutting it down for a month, the way they do with hotels when they lose their liquor licenses. Allow the import, for a month, of cheaper eggs from the US?
This type of nonsense gives all farmers a black eye, and we shouldn't just shrug our shoulders and say it doesn't affect the rest of us, because it definitely does.
Stephen Thompson, Clinton, ON
Comment modified by editors for legal reasons
Not true. In 2008 many farmers demanded, by legally passed resolutions at their AGM's, for the govenment to audit OFPMC.
The final line of the resolution was "so to ensure that the legally required audits are peer reviewed as a substantive right to vindicate public interests"
Many farmers are totally aware that complete accountability through audits are needed to retain public confidence and to ensure safety and security of their products.
Don't blame the farmers because the audits have NOT been performed yet.(and I hope this comment is not modified by the editors.)
Farmers have not shrugged their shoulders in indifference. Audits for value spent and "not limited" to were dully passed from the bottom up as is the OFPMC protocol. Be it government, boards or even here at BF the farmers voice is often stifled by editing for fear of the truth.
The big outstanding question is who is a defendant and who is a victim and how many of each are there?
Not knowing the truth can leave one or the public as a victim. Who is the producer? victim or defendant? Who is OFPMC as supervisor, victim or defendant?
Without ascertaining who knew what first and who did or did not report this question is hard to answer. One thing for sure the Mary Carter exhonoration greatly defuses the sights lines of truth or fiction.
The big question now will be,..... will the shadow govt feel it is important for justice to have a complete audit as required under law?
Try betting 5 cracked goose eggs that is whole mess will be investigated to the full extent like E- health was with the help of Globe and mail
Agriculture is always swept under the table sight unseen and always modified.
Teach the egg industry a lesson? Here's a fact; eggs are already shipped in from the states and go directly to egg breaking plants. The only people that shutting down the entire industry for one month would hurt is THE FARMERS! Do you honestly believe that it would hurt anyone else? That kind of thinking is naive at best and ridiculous at worst.
It is a very sad day for all the producers that have worked very hard to produce a very good product.
Comment appreciated but modified/removed by editors for legal reasons
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