Lawsuit alleges Eurofresh used unauthorized chemicals

12/02/2010 05:34:00 PM
Andy Nelson

(UPDATED COVERAGE, Dec. 3) A former employee of greenhouse vegetable grower-shipper Eurofresh Inc. claims the company used unauthorized chemicals and pesticides — and that he was fired for objecting to it. Eurofresh’s top official denies the charges.

In a suit filed Nov. 18 in Monterey County  (Calif.) State Superior Court, Brian McLaughlin, former chief financial officer of Willcox, Ariz.-based Eurofresh, says he was fired in November 2009 because he “refused to participate in and openly opposed the company’s unlawful use of chemicals and pesticides,” according to the suit’s complaint.

According to the complaint, between Eurofresh’s founding in 1992 and Sept. 1, 2009, the company “achieved its competitive advantage, in part, through the deliberate and willful use of at least 15 unregistered and, therefore, unlawful chemicals and pesticides to enhance the company’s tomato crops grown for human consumption.”

Ethrel, Asepta Carex and Calypso were the chemicals listed by name in the complaint.

At the time, Eurofresh said it fired McLaughlin because “the company’s senior leadership had purportedly lost ‘trust and confidence’ in his abilities,” according to the complaint.

Eurofresh’s chief executive officer, Johan van den Berg, denied the company used illegal chemicals and pesticides, and that McLaughlin was fired because he blew the whistle on the company.

“Eurofresh Farms has not and will not improperly use any products to grow its tomatoes and cucumbers,” van den Berg said.

After McLaughlin learned of the alleged use of chemicals and pesticides and told Eurofresh’s board of directors about it, Frank Van Straalen, the company’s current executive vice president of operations, threatened to fire him. Van den berg also denied that allegation.

The board hired an environmental consulting firm to investigate Eurofresh’s chemical and pesticide use. When it confirmed that Eurofresh had been using unauthorized chemicals and pesticides, according to the lawsuit, van den Berg “admitted during a board meeting that he had in fact made the decision to use the unregistered chemicals and growth regulator.”

In response to that charge, van den Berg said “at no time were chemicals or treatments used by Eurofresh applied in a manner that would be unsafe for consumer consumption or employee handling.” Van den Berg also said that Ethrel had been approved for non-greenhouse tomatoes.

Eurofresh eventually registered Ethrel, which is widely used in Dutch greenhouses, with the Environmental Protection Agency and the State of Arizona.

Arizona approved its use pending EPA approval, but the EPA did not approve it. According to the complaint, Van Straalen instructed Karen Tifft, Eurofresh’s biocontrol manager, to continue using Ethrel while the company appealed the EPA decision.

In May 2009, according to the lawsuit, Tifft told David Godfrey, Eurofresh’s vice president of human resources, who told McLaughlin and Dwight Ferguson, then the company’s president and chief executive officer.

Ferguson “immediately directed Van Straalen to halt all further use of Ethrel,” according to the lawsuit. Ferguson, who is now the president and chief executive officer of Naples, Fla.-based Naturipe Farms LLC, left Eurofresh in November 2009.

Van Straalen did not tell Tifft to continue using Ethrel, van den Berg said. Instead, Van Straalen instructed employees not to use Ethrel while the EPA reviewed Eurofresh’s appeal.

In September 2009, Eurofresh won its EPA appeal and Ethrel was approved for use in the U.S.

Ferguson left Eurofresh voluntarily, van den Berg said. Ferguson declined to comment.

McLaughlin also claims he was criticized for recommending a review of Eurofresh’s accounting practices, and that he and the company’s auditors found the company had overstated its earnings by $10.3 million.

Van den Berg also denied that charge, saying there was no “restatement of earnings.”

Eurofresh emerged from Chapter 11 bankruptcy in November 2009, the month McLaughlin was fired and Ferguson left the company.



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