Kroger's ex-CEO ordered to reveal why he resigned — and '90s pop star Jewel is the driving force

Business Insider

a day ago

Kroger's ex-CEO mysteriously resigned from the supermarket giant earlier this year — and now, thanks to a nearly two-year-old lawsuit that the singer-songwriter Jewel is behind, he's been ordered to reveal the reason for his exit.
Attorneys for Rodney McMullen have argued in recent court documents that his March resignation has absolutely nothing to do with the "You Were Meant For Me" singer's 2023 contract breach lawsuit against Kroger and questions about it in a deposition are aimed at "annoying and embarrassing" him.
McMullen is not named as a defendant in the lawsuit and his attorneys had sought a protective order in the case playing out in an Ohio court that would bar questioning about the circumstances surrounding his abrupt resignation.
Kroger's filings with the Securities and Exchange Commission show that McMullen forfeited $11.2 million in bonus and stock payments when he stepped down from the CEO role he held for more than 10 years.
On August 1, Hamilton County Common Pleas Court Judge Christian Jenkins ruled that McMullen must explain in a written response what led to his exit from Kroger as well as the identities of those involved.
The judge noted in his order that McMullen "argues that this line of questioning is completely irrelevant, is not proportional to the needs of the case, and would be embarrassing to Mr. McMullen," while the plaintiffs argue that McMullen would be a witness in their case and that the questions about his employment history are "routine."
The plaintiffs in the case — Wellness Your Way Festival, LLC, which Jewel is an owner of, and Inclusion Companies, LLC — argue that details around McMullen's resignation could be relevant to his credibility and "the existence of an allegedly corrupt corporate culture at Kroger," Jenkins wrote.
When announcing McMullen's resignation in March, Kroger said McMullen had resigned after an investigation into his "personal conduct." The conduct, the grocery chain said, was "unrelated to the business," but added it was "inconsistent with Kroger's Policy on Business Ethics."
The judge pointed to this announcement in his recent ruling, saying, "Based on this, it is plausible that this evidence could reflect on Mr. McMullen's credibility or Kroger's corporate culture, as alleged by Plaintiff."
"However, without knowing the basis for the alleged embarrassment, it is impossible to weigh it against the relevancy and proportionality," Jenkins wrote.
It remains to be seen whether McMullen's response — which was due August 8 — would become public. The judge said that if he grants McMullen's request for a protective order, his response would be made part of the record under seal. If Jenkins denies the order, it will not be entered into the record.
Jenkins ordered that McMullen's response be hand-delivered to the judge's chambers. It is not clear if McMullen's response had been submitted.
Attorneys for both McMullen and Kroger did not immediately respond to a request for comment by Business Insider on Wednesday.
Brian O'Connor, a lawyer for the plaintiffs, told Business Insider that his clients are "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."
"As attorneys, we expect that court orders are obeyed," O'Conner said, adding that he has not been provided with a copy of McMullen's response.
The lawsuit against Kroger involves its annual Wellness Festival
The 2023 lawsuit against Kroger stems from allegations of a breach of partnership agreement between the supermarket chain and Jewel and her business partner, Trevor Drinkwater, the CEO of Inclusion, over Kroger's annual Wellness Festival event in Cincinnati.
The court papers say that Jewel, born Jewel Kilcher, and Drinkwater conceived of the wellness festival and entered into a five-year partnership agreement with Kroger to put it on.
The festivals took place in 2018, 2019 and 2021 with Jewel performing at the events, the court documents say, alleging that Kroger "unilaterally terminated the partnership" on "wholly manufactured and easily disprovable grounds."
The lawsuit says that Kroger went on to produce a "highly profitable" year-four event in 2022 and an even more profitable event in 2023 "using the know-how, marketing materials, contracts, and sponsor lists that Plaintiffs had contributed to the partnership."
The plaintiffs allege in the court papers that they lost more than $2 million in out-of-pocket costs and at least $5 million in profits as a result of Kroger's "corporate bullying mentality that led to its breach of the partnership agreement and theft of the festival."
Kroger has filed a motion to dismiss the lawsuit, arguing in court papers that there was no enforceable contract.