A lawsuit involving Kroger and singer Jewel could shed light on why the former supermarket CEO mysteriously resigned

CNN

4 days ago

In March, Kroger's CEO resigned from his corner-office role after nearly five decades at the company — an abrupt exit that left questions and $11 million on the table. Now, a lawsuit involving '90s folk sensation Jewel could bring some answers.
Rodney McMullen, who joined Kroger in 1978, left after an internal investigation into 'his personal conduct,' the grocer said in a statement at the time. The Cincinnati-based company had kept the details tightly under wraps.
A lawsuit from 2023 might push Kroger or McMullen himself to reveal those details. In legal filings, the plaintiffs — which include a company co-owned by singer-songwriter Jewel Kilcher — accused Kroger of breach of contract over a wellness festival partnership. McMullen isn't a defendant in the lawsuit, but he was identified as a trial witness.
McMullen and his lawyer refused to answer questions about his resignation during deposition this year and requested a protective order to bar questioning on the 'embarrassing' topic, as described by his lawyer in court documents. But an Ohio judge had ordered McMullen to submit a written response by August 8 about his resignation, including the names of people involved.
There will be 'incredible consequences… if this ever gets out,' McMullen's lawyer, Jeffrey Hinebaugh, said in front of the judge in May.
Hinebaugh added that 'having to sit there and explain to people something that's completely unrelated and personal is the embarrassment.'
The plaintiffs, meanwhile, said these questions are 'routine' and could reveal the corporate culture at Kroger.
'We respect the court's thoughtful ruling, and we're pleased that the court is not giving Mr. McMullen a free pass to avoid testifying just because the former CEO's lawyer says that answering questions would be embarrassing,' Brian O'Connor, a lawyer representing the plaintiffs, said in a statement to CNN.
CNN has reached out to Hinebaugh for comment. Kroger declined to comment.
However, the public will not get its eyes on McMullen's written response. If the court grants the protective order, the statement will be made part of the record kept under seal – meaning it's only available under judicial eyes. And if the court denies the request, then the written disclosure won't be entered into the record at all.
But if the court decides to deny the request, more information on McMullen's resignation may come out because the plaintiff's lawyers would be able to question the ex-CEO on the topic. A trial is set for May 2026.
Jewel had come up with an idea for a wellness festival alongside Trevor Drinkwater, CEO of Inclusion Companies. Drinkwater's company already had experience creating other retail-sponsored, celebrity-backed festivals like Bentonville Film Festival.
Jewel and Drinkwater then decided to partner with Kroger on the 'Wellness Your Way' festivals for five years, according to the lawsuit. There was no formal agreement, but rather an agreement over email in June 2018 since Drinkwater's company would take the financial risk, the lawsuit said.
Festivals under the partnership took place from 2018 to 2021, and Jewel performed a total of 12 times and and participated in 45 panels at these events, according to a legal complaint. But after the festivals became profitable, Kroger replaced Drinkwater and Jewel's company with one run by Kroger executive Colleen Lindholz's sister, legal filings allege. The plaintiffs argue this violated Kroger's business ethics policy.
'(Lindholz) also informed (Drinkwater) that the festival had become Kroger's premiere annual corporate event, the CEO Rodney McMullen wanted to make it a part of his legacy, and Kroger needed to have ownership and control of it,' the lawsuit said.
Kroger and the new company, Advantage, went on to host two more festivals in 2022 and 2023. The lawsuit alleges the plaintiffs lost $2 million of their own money and profits of at least $5 million.
McMullen told Jewel over email, 'I'm not involved in planning of the Festival this year. That's Colleen's responsibility. Please communicate with her on this,' according to the lawsuit.
McMullen resigned in March after a company investigation found his personal conduct was 'inconsistent' with Kroger's ethics policies. The company said it did not involve Kroger's finances and no associates were involved.
His resignation came a few months after Kroger rival Albertsons called off its $25 million merger with Kroger amid regulatory pressure. Albertsons subsequently sued Kroger for breach of contract agreement.
Albertsons' lawyers, too, are curious about the circumstances leading to McMullen's departure. The company wants to compel Kroger to disclose McMullen's actions because it could have distracted him 'or conflicted with his obligations to Kroger' during the doomed merger process.
'McMullen's conduct and business ethics are central to this litigation,' Albertsons said in a motion filed late July. 'Yet Kroger refuses to produce any documents regarding significant lapses of 'business ethics' so serious they cost McMullen his job weeks after the Merger was blocked.'
McMullen earned roughly $15.7 million in 2023, according to an SEC file. With his resignation, he forfeited more than $11 million in unvested stock and options, and any bonuses.
CNN's Jordan Valinsky contributed to this report.