Sysco Corporation Settlement

Sysco Corporation Settles Multi-Million Dollar Consumer Protection Lawsuit Brought by District Attorneys

Alameda County District Attorney Nancy E. O’Malley today announced that Sysco Corporation, the country’s largest food distribution company, and its California Operating Companies (OpCos) will pay almost $20 million dollars in restitution, costs and penalties as a result of, among other things, the OpCos' illegal practice of holding perishable foods in unregistered and/or unrefrigerated storage sheds.

Through its OpCos, Sysco delivers food products to restaurants, schools, hotels and other commercial establishments. Sysco uses a fleet of refrigerated food trucks to transport most of its products. Last year, it was discovered that, for some small orders, Sysco food trucks had been delivering products to unregistered storage sheds for later pick-up by marketing employees who then transported the food in their personal vehicles to commercial customers.

The report triggered a state-wide investigation by the California Department of Public Health which revealed that Sysco OpCos had used over twenty unregistered storage sites in California. Most of the sites had no refrigeration and some were unsanitary. A civil enforcement proceeding brought by the California Food, Drug and Medical Device Task Force -- comprised of ten District Attorney’s Offices, including the Alameda County District Attorney’s Office -- resulted in today’s settlement. The case was filed in Santa Clara County Superior Court (Docket #114CV268078).

The Complaint alleges that Sysco’s practices violated a number of laws set forth in California’s Health and Safety Code, including transporting and holding potentially hazardous foods above a safe temperature and temporarily storing food in unregistered sites. The Complaint also alleges that Sysco engaged in misleading advertising by claiming, for example, that “We go to great lengths to ensure that our suppliers and our state-of-the-art distribution warehouses maintain the highest standards, often above and beyond government regulations."

“Our State laws governing the safe transport and storage of foods are vital to ensuring the health and well-being of all consumers,” states DA O’Malley. “When a company ignores the safeguards it must legally take to ensure that food is safe to eat, it puts us all in danger. I applaud the outcome of this action, and assure the community that my Office will be vigilant in prosecuting illegal conduct that puts us all at risk.”

Sysco voluntarily cooperated with the investigation and ceased its unsafe practices.

In addition to paying $15 million dollars in civil penalties, the Defendants agreed to pay over $4 million in restitution, including a $1 million contribution of food to food banks throughout California and $3.3 million to fund a five year state-wide program for the inspection and enforcement of food transportation laws. In addition to prohibiting the alleged unsafe food transportation and storage practices, the Court judgment requires Sysco to develop a comprehensive food safety program to ensure that these practices are not repeated.

Contact: DDA Matthew Beltramo
(510) 383-8600
Alameda County District Attorney’s Office

Posted on Aug 1, 2014