Proposed Class Action Targets Shoppers Drug Mart Over Allegations of ‘Unethical Corporate Practices.
Former Shoppers Drug Mart Franchise Owner Launches Class Action Alleging ‘Unsafe and Unethical’ Corporate Practices” A former franchise owner of Shoppers Drug Mart has initiated a proposed class action lawsuit against the Canadian retail pharmacy chain and its parent company, Loblaw. The lawsuit alleges that the companies enforced “unsafe and unethical” corporate practices on franchise owner pharmacists in pursuit of higher profits.
Filed in the Ontario Superior Court last week, the lawsuit seeks to represent both former franchise owners whose agreements were terminated since 2014 and current franchise owners in Ontario. However, it is important to note that the lawsuit has not yet been certified or tested in court.
At the heart of the legal action are allegations that corporate directives, such as setting targets for medication reviews, reducing support staff hours, and implementing revenue-focused mandates, have created an “irredeemable conflict of interest” for Shoppers Drug Mart franchise owners, who also serve as pharmacists.
As per the lawsuit, the ramifications of this conflict could lead to the suspension or revocation of a pharmacist’s license.
The former owner was “distraught” upon learning of the revocation of their franchise.
For former franchise owners such as the primary plaintiff, Sivajanan Sivapalan, the lawsuit asserts that they and others faced franchise revocation or non-renewal for speaking out against the purportedly unethical practices.
As per the court documents, Shoppers Drug Mart notified Sivapalan in January 2023 that his franchise in Beamsville, Ont. had been terminated, without providing any reasons for the decision.
The lawsuit contends that for the current franchise owners included in the proposed class, corporate practices such as medication review targets hinder their capacity to exercise professional judgment as pharmacists and provide safe and effective patient care.
The lawsuit claims that corporate practices, such as setting medication review targets, impede the current franchise owners’ capacity to exercise their professional judgment as pharmacists and provide safe and effective patient care.
“Shoppers Drug Mart has taken no action to address the clear risks posed by the Corporate Practices to patient safety, the resulting breach of Franchisees’ professional and ethical obligations, and the consequent risk of regulatory scrutiny and sanction by the Ontario College of Pharmacists,” reads the claim.
“Instead, Shoppers Drug Mart has more aggressively implemented the Corporate Practices to maximize profits.”
A Shoppers Drug Mart spokesperson said the decision to deliver a professional service, like a medication review, must be made by a pharmacist using their judgment.
The lawsuit contends that in practice, the pharmacy chain is effectively undermining the essence of its franchise agreements. According to the allegations, if a pharmacy owner faces sanctions from the provincial regulator due to corporate practices, it would provide Shoppers with grounds to terminate the franchise agreement. Consequently, the proposed class action seeks the court’s determination that Shoppers violated its franchise agreements with the class and seeks damages for these purported breaches.
