Update: This lawsuit was dismissed with prejudice under a settlement agreement on Sept. 28, 2018. The terms of the settlement were not disclosed. The federal government did not object to the settlement, according to a motion filed by the plaintiff's attorneys on Sept. 20, 2018.
A woman who says she was terminated for calling to attention her former employer’s scheme to underpay postage by nearly $20 million has filed suit against Chicago-based printer and mass marketer RR Donnelley.
In a lawsuit unveiled last week, plaintiff Mary L. Williams asserted she worked for RR Donnelly from Jan. 1, 2013, through Aug. 11, 2015. In her complaint, Williams alleged managers for RRD began submitting false reports to the U.S. Postal Service in June 2014 to save money on postage and avoid paying labor costs associated with properly sorting mail at the company's facility in west suburban Aurora.
In October 2017 she filed a so-called qui tam complaint in federal court in Chicago as a relator ostensibly seeking to recover funds on behalf of the federal government. However, the federal government waived its right to intervene by not making a filing in the case by a Dec. 12, 2017, deadline.
On Feb. 6, Williams filed an amended complaint withdrawing the portion of her claim seeking recovery on behalf of the government and limiting her lawsuit to the wrongful discharge charges, asking the court to order the company to reinstate her at her previous salary, benefits and seniority, as well as doubled back pay with interest and compensation for legal fees.
Williams said the problems started “shortly after” two men she identified as John Murphy and Dean Mallet took over Donnelly’s Aurora facility on June 1, 2014, and sought to address delays and losses associated with bulk mail. RRD is a presort bureau authorized to process commercial letters and postcards for First-Class and Standard mail for its customers. The USPS picks up First-Class mail, while Donnelly delivers standard mail to specified USPS locations for distribution.
According to the complaint, customers like RRD are able to lower the per-piece cost of mail by sorting mail to specified standards. However, Donnelly “cheats the Postal Service of postage revenue by making false claims about the postage paid or what postage should have been paid,” Williams alleged.
After attaching payment forms to mail skids, Williams said, Donnelly “secretly shrink wraps more mail onto the skid for which no postage was paid at all, or which insufficient postage was calculated, and fails to report or pay the postage for added mail.” She estimated the scheme allowed Donnelly, which processes more than a million pieces of First Class mail per day, to save between $4.3 million and $19 million in the last year.
Donnelly, the complaint continued, “is giving between 0.5 percent and 2 percent of First-Class mail that it receives from its customers to the Postal Service while concealing the fact that it paid no postage at all for this mail or that some or all of such mail does not qualify for automation — or even for machineable — presorted pricing.”
Williams also said Donnelly pays no postage on between 1 and 3 percent of the 8 million pieces of Standard mail it funnels between its customers and the USPS each week. In her complaint, she detailed the processes Donnelly allegedly used to account for mail it cannot or will not properly sort and yet submits to USPS for delivery “under the cloak of properly sorted and priced mail.”
She said after she reported the alleged impropriety, the company changed internal mail sorting signs but still “secretly processed” pieces improperly and adjusted work schedules to avoid detection.
“As 30,000 to 50,000 pieces are scattered by zip codes across the country it does not make a huge variance during the Postal Service’s verification audit the next day,” the complaint alleged.
After informing Murphy and then Mallet, Williams said she took the matter to human resources. Shortly after, Donnelly fired Williams’ daughter, citing a workforce reduction, and later fired Williams herself, again for the same stated reason.
Williams is represented in the matter by Collins & Collins, of Chicago.
A spokesperson for RR Donnelley contacted by the Cook County Record declined to comment on the case