Michigan court dismisses suit against Wal-Mart

A federal court in Michigan dismissed a former Wal-Mart executive's breach of contract lawsuit against the company, saying it should have been filed in Arkansas instead of Michigan.
In her lawsuit, which was filed May 25, Ms. Roehm fired off a laundry list of allegations against company CEO Lee Scott.

H. Lee Scott, the current President and Chief Executive Officer of Wal-Mart, initiated (at a time when Mr.Scott was the Vice-President of Merchandising) an association with entrepreneur Irwin Jacobs, allowing Mr. Jacobs' business, Jacobs Trading Company (JTC), the exclusive right to purchase unsold Wal-Mart merchandise. Jacobs Trading Company is one of several privately-held companies owned by Mr. Jacobs. Upon information and belief, Mr. Jacobs also owns or owned interests in approximately 12 boat manufacturing companies, and as part and parcel of Mr. Scott's relationship with him, over the span of several years, Mr. Scott has purchased from Mr. Jacobs' companies a number of yachts at preferential prices. Upon information and belief, Mr. Scott also was also able to purchase, through his relationship with Mr. Jacobs, a large pink diamond for his wife at a preferential price.

In the filing, Ms. Roehm claims Scott's relationship with Jacobs also extends to Jacobs' employment of Scott's son:

Mr. Scott’s son, Eric S. Scott, who initially was employed by Wal-Mart as a buyer, ultimately left Wal-Mart for employment with Jacobs Trading Company. Wal-Mart has chosen to ignore the fact that Mr. Scott's circumstances create "[t]he appearance of conflict [which] may be just as damaging to Wal-Mart’s reputation as an actual conflict."

Ms. Roehm, who was fired following allegations that she accepted gifts from an advertising agency that deals with Wal-Mart. She was in charge of marketing and communications. Company officials also claimed Ms. Roehm had an affair with someone who worked for her.

In the court document, Ms. Roehm noted that a former official who had a well-known affair with a subordinate was never penalized for it:

Robert Rhoads was variously a Vice President and Senior Vice President, General Counsel, and Corporate Secretary for Wal-Mart from 1988 through 2002. Mr. Rhoads had an affair with Lauren Beamon, a subordinate employee in the Wal-Mart legal department. Mr. Rhodes paid for her apartment and college tuition, divorced his wife, and subsequently married Ms. Beamon. Mr. Rhoads was not subject to "immediate termination," even though it was known that he and Ms. Beamon had married and that he had been her supervisor at Wal-Mart.

Ms. Roehm was fired on Dec. 4, 2006.