Office Depot's battle with former employee gets national attention

— Fort Myers resident David Sherwin’s campaign against Office Depot has received its first mainstream national media coverage with the release of an article Tuesday in Fortune magazine.

The development comes a week after the company posted a video to its YouTube account criticizing the former Office Depot employee and announcing it is working to earn back the trust of customers influenced by him.

“I think that the YouTube video and the Fortune article will be looked back upon as a turning point where the momentum has shifted directly against Office Depot,” Sherwin said.

Video from YouTube

Lee County government $160,467 (two refunds)

City of Cape Coral $51,603

Edison State College $24,234

Sarasota County School District $41,124

Charlotte County government $75,146

City of Naples $12,042

Lee County School District $297,063

City of Pembroke Pines $22,000

The one-page Fortune article features a photo illustration of Office Depot CEO Steve Odland in an aisle of one of the company’s stores, wrapped in red tape and with paper airplanes flying at him. By Tuesday evening, it was the most read article on Fortune's Web site, where it is available for free sans the photo illustration of Odland.

Read Fortune story

Though it does not directly quote Sherwin or Odland, the Fortune article might be the first in which Odland has statements concerning Sherwin attributed to him.

“Office Depot CEO Steve Odland, who has run the $14.5 billion (in revenue) chain since 2005, says Office Depot is a victim of attacks by disgruntled ex-employees,” said the article, written by Fortune writer Suzanne Kapner.

Sherwin doesn’t deny being disgruntled. Company officials also point out that, as a senior account manager, Sherwin would have participated in the conduct he now alleges, a point Sherwin says is the exact reason he is disgruntled.

Since he was fired by Office Depot for sending profane and threatening e-mails in April 2008, Sherwin has been accusing the company of overcharging thousands of government and nonprofit customers. In the video, Office Depot Business Solutions Division President Steve Schmidt calls Sherwin’s accusations “outrageous” and points out Sherwin funds his campaign through donations from Office Depot competitors.

Eight Florida agencies have received nearly $800,000 in refunds since Sherwin leveled his allegations, four federal agencies have become involved in a single investigation into the company’s federal government sales, and agencies in seven states have announced their own investigations, including the Florida Attorney General.

In the video, Schmidt said the company has established a department to check for contract compliance and is making efforts to win back customers’ trust.

“To those customers who have read a slew of negative and one-sided media reports and remain uncertain, I say that Office Depot is redoubling its efforts to earn your trust,” Schmidt said in the video.

Though the company would not specify when it began to redouble its efforts, in order for Lee County School District Superintendent James Browder to receive a $297,063 refund from Office Depot a month ago, the company asked him to sign a document promising not to seek recourse for any additional issues he may discover with the contract, which the district no longer purchases from.

Further, in a letter sent to Naples Daily News Editor Phil Lewis last month, Office Depot Vice President of Communications Brian Levine made a statement that conflicts directly with what Browder said his experience with the company was.

The refunds have been issued in relation to a second pricing plan added in 2006 to a national piggybacking contract the company has with 10,000 government and nonprofit customers. Sherwin said the company told him to sell the now-defunct plan to the district “under the guise of a cost-savings measure.”

In the letter, Levine said the company contacted the district and all of its major accounts before Sherwin was fired and later followed up with a written confirmation process.

However, Browder said the company could not provide any documentation showing the decision to approve the pricing plan switch was authorized, and Office Depot has ignored multiple Daily News requests for similar information about any of the customers that were on the second pricing plan.

Posted earlier:

Fort Myers resident and former Office Depot account manager David Sherwin has received the first mainstream national media coverage of his campaign against the Boca Raton, Fla. office supply giant with a feature mentioning him in Fortune magazine.

The development comes about a week after an Office Depot division president, Steve Schmidt, attacked Sherwin's credibility in a video posted to the company's YouTube account and said the company would be "re-doubling" its efforts to win over the trust of any customers influenced by Sherwin's "misinformation."

Sherwin has been credited by Lee County School District Superintendent James Browder with providing the information that led to the district receiving a $297,063 refund from Office Depot.

The company denies all overcharging allegations leveled by Sherwin, saying his claims are "outrageous."

CONCLUDED INVESTIGATIONS

The Daily News documents government inquiries into Office Depot's government contract practices as we become aware of them or when they conclude. Many of these inquiries were full-blown investigative audits, while others consisted of government officials calling Office Depot and asking for a refund. For a full listing of all the inquiries, including descriptions of their findings and related documents, click here.

  • Number of concluded inquiries: 25
  • Number of concluded state-level inquiries: Seven, including two conducted in North Carolina and Florida, and one each in Georgia, Nebraska, California and Missouri.
  • Number of second pricing option refunds issued: Nine, not including any refunds issued due to statewide settlements in Missouri or Florida or refunds not disclosed by the government agencies receiving them
  • Total amount of second pricing option refunds or credits: $683,679, not including those issued from the $320,000 and $4.5 million accounts set up by the Missouri and Florida attorneys general, respectively
  • Total amount of all refunds, credits or other settlement costs: $11,409,295, including the second pricing option refunds, settlements with the states Georgia, California, Florida and Missouri, and a refund paid to the City of Berekely, Calif.
  • View the complete list of all concluded investigations, including their findings and related documents here.

ONGOING INVESTIGATIONS

When documentation verifying David Sherwin's claims of certain ongoing investigations can be found, they will be added to the list. Currently, Sherwin said the state of Washington's Office of Special Investigations and the Dallas County, Texas fraud auditor are also examining Office Depot's government contracts.

  • February 2009: Office Depot releases in its annual report that three federal agencies, the Departments of Defense and Education and the General Services Administration, are working with the Department of Justice in investigating the company’s government contract pricing practices. Sherwin refused comment on the investigation. (Read filing, page 16)
  • April 2009: Office Depot releases in its quarterly report that it is also being investigated by the Texas Attorney General's Office in relation to pricing practices, primarily with government customers. (Read filing, page 21)
  • April 2009: Detroit Public Schools Inspector General John E. Bell says in the Detroit News that he is looking into the district's purchases through Office Depot's national piggybacking contract with Los Angeles County.
  • July 2009: Office Depot announces in its quarterly report that it is also being investigated by the Colorado, California, and Ohio Attorneys General in relation to pricing practices, primarily with government customers. (Read filing, page 30)
  • November 2009: Collier County School District Superintendent Dennis Thompson orders a review of allegations the district has been overcharged by Office Depot. The district purchases through the company's national piggybacking contract with Los Angeles County. (Read story)

THE DOCUMENT TRAIL

  • Background on David Sherwin: Discharge paper from the Air Force, certificates detailing training received while an inspector general with the Florida Department of Health and Human Services, an article detailing the biggest case Sherwin handled while with HRS, and Sherwin's arrest reports. (Read documents)
  • Documents provided by David Sherwin: Beginning with a June 2006 performance review in which Sherwin said he is encouraged to sell L.A. County option two pricing to increase IMU (profit), continuing with a series of e-mails leading up to the one which Sherwin said got him fired (contains explicit language), a cease and desist letter Sherwin said he received from Office Depot (which he ignored), and ending with the minutes of a meeting between L.A. County and Office Depot officials, in which issues with the contract are discussed. Office Depot officials have not confirmed the authenticity of the documents. (Read documents)
  • L.A. County Master Agreement 42595: A copy of the original agreement shared by about 10,000 government agencies. (Read contract)
  • Second pricing option: A list of the largest agencies using the second pricing option sent to Los Angeles County in October 2008.(Read documents)
  • The new pricing option: In February 2009, Office Depot announced it will be doing away with the L.A. County agreement’s two pricing plans, and transition all customers to a new, simpler pricing plan on March 30, 2009. In a release, the company says the new plan will offer "enhanced transparency and accountability." (Read release)
  • David Sherwin's communication with state and federal agencies: Beginning with his communication with the offices of the Florida Attorney General and Inspector General, continuing with an e-mail from the Securities and Exchange Commission, and concluding with letters from the states of Pennsylvania, Texas and Alabama. (Read documents)

© 2010 marconews.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

  • Discuss
  • Print

Related Stories

Related Links

Comments » 0

Be the first to post a comment!

Share your thoughts

Comments are the sole responsibility of the person posting them. You agree not to post comments that are off topic, defamatory, obscene, abusive, threatening or an invasion of privacy. Violators may be banned. Click here for our full user agreement.

Comments can be shared on Facebook and Yahoo!. Add both options by connecting your profiles.

Features