Ex-worker sues Canteen Corp. over firing

August 26, 1993|By Kim Clark | Kim Clark,Staff Writer

A Howard County man has sued the Canteen Corp. for improperly firing him, alleging that he was dismissed because he attempted to stop the food supply company from overcharging its customers -- from the White House cafeteria to blind vendors in Baltimore office buildings.

In a lawsuit filed Tuesday in U.S. District Court in Baltimore, Robert E. McKelvey Jr. of Dayton charged that the Spartanburg, S.C.-based company also improperly overcharged its employees for health insurance.

Canteen spokeswoman Elaine Richner said yesterday that the company had not yet received a copy of the suit and would have no comment.

Canteen is owned by Flagstar Companies Inc., which is headed by Jerry Richardson. Mr. Richardson also heads a group attempting to bring a professional football team to Charlotte, N.C.

In the lawsuit, Mr. McKelvey, who was fired as Canteen's Mid-Atlantic regional vice president in May, alleged that Canteen cheated its customers so it could help pay off Flagstar's bills from a leveraged buyout.

The lawsuit said Canteen cheated its government customers -- including the cafeterias and vending machines in the White House complex and the Department of Justice in Washington -- by inflating its costs.

Government contracts usually call for Canteen to be paid based on its costs plus a management fee, the lawsuit said. But from 1990 through 1992, Canteen sent the government bills for food costs that didn't, for example, reflect large rebates that Canteen often received from food manufacturers, the lawsuit said.

Mr. McKelvey said in a telephone interview late yesterday that he estimated the nearly 400 customers he oversaw in the Mid-Atlantic region, including blind vendors in government buildings throughout Maryland, overpaid Canteen nearly $1 million last year.

In addition, he said, the company raised the amount it charged employees for health insurance this year, even though it had built up a $3 million surplus in the health insurance account in 1992, and expected a similar surplus in 1993. The lawsuit said that Mr. McKelvey's dismissal ostensibly resulted from a company investigation into a complaint that he transferred into his region a female employee with whom he allegedly had a relationship. While Mr. McKelvey said he did transfer the woman, he denied that he had done anything improper.

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