Former CVS VP says company made him the fall guy in harassment scandal in new lawsuit

PROVIDENCE – A former senior vice president at CVS Health who helped oversee the pharmacy chain’s pandemic response is suing his ex-employer, accusing the company of illegally reneging on his severance agreement and scapegoating him as a publicity move amid a sexual harassment scandal.

Emmanuel Kolady sued CVS Pharmacy Inc., CVS Health Corp. and other CVS entities last week in U.S. District Court, alleging that the company breached its severance agreement with him, violated wage laws in his home state of Pennsylvania and arbitrarily and capriciously denied his benefits claims in violation of the Employee Retirement Income Security Act.

Kolady oversaw the COVID testing unit before termination

Kolady started with the pharmacy giant in September 2014 as a regional manager based in Florida, according to his LinkedIn profile. He continued to rise through ranks until being named senior vice president in charge of stores in 2019, a role in which he oversaw more than 5,000 CVS stores, 100,000-plus employees, and about $40 million in total revenue. During the COVID-19 pandemic, Kolady oversaw CVS’s COVID testing unit.

That is, until he was “abruptly terminated … without cause” effective Jan. 29, 2022, according to his lawsuit.

“While Kolady was disappointed and did not understand the basis for the decision, he accepted CVS’s explanation that his termination was only because of CVS’s `changing needs, direction and organization,’” his lawyer, Charles D. Blackman, wrote in the suit.

The parties reached a severance agreement in which Kolady would be paid a semi-monthly rate of $18,750 from Jan. 30, 2022 through July 29, 2023.

The agreement required Kolady to release all claims he could assert against CVS and contained a provision in which he agreed that if CVS ”learns that your employment should have been terminated due to acts of unethical business activity, including but not limited to fraud, misappropriation, embezzlement, dishonesty, harassment or discrimination,” the severance payments would cease.

A spokesman for CVS declined comment because the matter is in litigation.

Severance payments `almost immediately’ cease

According to Kolady, CVS breached the agreement almost immediately under false pretenses in an attempt to scapegoat him for sexual harassment allegations against a manager who did not report directly to him – claims he said he had no involvement in and was not aware of until being told by human resources.

Weeks later, he reached out to human resources to inquire about a missing bonus payment.

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“I also continue to be very disappointed in how my exit has been and is still being handled given the assertion in the [Wall Street Journal] article, plus the CEO email, both insinuating I was somehow part of the harassment problem ...,” he wrote, the suit said.

The article read that “[Chief Executive Officer Karen Lynch] oversaw an investigation, carried out by a professional investigator, that culminated in January in the dismissal of the [perpetrator], who oversaw hundreds of stores, and the departure of senior executives who supervised him,” according to the reporting.

It quoted an internal memo detailing that the allegations had been substantiated, and that “‘Our investigation also revealed that other employees failed in their duty to treat such allegations with the seriousness we expect, and they are no longer with the company.’”

CVS backs out of agreement over sexual harassment investigation

Kolady was informed that the company was ceasing the severance terms amid an investigation “in which senior leadership is learning additional facts and circumstances of serious concern regarding your conduct as a former leader during your tenure with CVS Health,” the suit says.

Kolady charges that the decision to breach the agreement “had nothing to do with any good faith determination” as mandated.

“Instead, upon information and belief, CVS’s decision to breach was motivated by adverse publicity the company was receiving in connection with various sexual harassment allegations that had nothing to do with Mr. Kolady, and CVS’s decision to blame Mr. Kolady internally and externally was part of these public relations efforts,” the suit said.

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Kolady stood by his tenure with CVS, emphasizing that he never engaged “in any sexual harassment, approve of any sexual harassment by others, or take any action (or not take any action) that would foster a culture where such behavior is permissible.” He cited the company’s robust reporting options.

Kolady, who now works at the CEO at Follett Higher Education Group, according to LinkedIn, alleged that people ”would conclude that Mr. Kolady’s employment had been terminated in connection with the sexual harassment complaints."

Kolady accused CVS of then forcing him to engage in a “sham” benefits-claim process in which the administrator said they had received five complaints alleging serious misconduct by employees under his oversight and certain negative Reddit posts.

According to the suit, the administrator said the investigation had found within Kolady’s organization and that a "toxic" work environment had been tolerated, with employees afraid to report misconduct.

Kolady, through his lawyer, faulted the administrator accepting as truth representations by CVS that “‘Mr. Kolady hates kittens’ or some other unfounded and unsubstantiated conclusion'" in the denial of his benefit claims.

His appeal of that decision was similarly denied.

Kolady asks the court to order CVS to honor the severance agreement and award him unspecified damages for the company’s “willful” violations, plus attorney’s fees.

This article originally appeared on The Providence Journal: Former CVS Health VP sues company for breaching severance agreement