June 11, 2015

Chartwells Logo hi resChartwells, the largest food vendor for DC Public Schools (DCPS), recently agreed to a $19.4 million settlement with the the District of Columbia’s Office of the Attorney General to resolve claims the vendor overcharged the city’s government and provided substandard nutrition to students.  Terms of the settlement include over $14 million in repayment to the District government and another $5 million in philanthropic payments to D.C. schools and nonprofit organizations.  DCPS will continue its contract with Chartwells.

The settlement comes as a result of a whistleblower action initiated by Jeffrey Mills, a former executive director of the school system’s Office of Food and Nutritional Services.  Mills was fired from his position in 2013 and has since recovered $450,000 in his own separate settlement with the District alleging wrongful termination.  Mill’s wrongful termination suit alleged he was fired for raising concerns over Chartwells mismanagement of the contract with DCPS.

The contract between Chartwells and DCPS was supposed to be a cost saving and quality control measure by shifting food preparation for DCPS from in-house operations to private contractors.  The goal was to reduce costs and provide more nutritious meals of DCPS students.  Instead, Mill’s suit alleges, the contract was wrought with mismanagement including overcharging for services, delivering rotting food, and an inability to fulfill orders.

Chartwells and its parent company, Compass Group USA, are no strangers to controversy.  In 2014, students at a Connecticut high school staged a boycott of Chartwells’ school lunches and in 2012 Compass Group USA settled its own $18 million lawsuit brought by the New York state Attorney General.

Mills brought his suit under the qui tam provisions of the False Claims Act.  Qui tam actions allow private citizens to bring civil lawsuits on behalf of the government to recover money lost through fraud, waste, or abuse of government contracts.  While The Cochran Firm, D.C. did not represent Mr. Mills in this case, The Cochran Firm, D.C. handles qui tam litigation and other whistleblower complaints. If you or someone you know is aware of a company overcharging the government or providing substandard service, please call 202-682-5800 for a free whistleblower consultation.