Proposed class-action lawsuit against Shoppers Drug Mart alleges 'unsafe and unethical corporate practices'

Shoppers Drug Mart is facing a proposed class-action lawsuit by current and former franchise owners at the retail chain who allege parent company Loblaw engaged in corporate practices that placed them in an “irredeemable conflict of interest” and put patient care at risk.

The suit, which has not yet been certified, was filed last week at the Ontario Superior Court of Justice by Toronto-based law firm Ricketts Harris LLP and lists the plaintiffs as current and former pharmacists, who had their agreements with the company terminated after 2014.

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In a statement of claim reviewed by CTV News Toronto, the class action alleges that a number of corporate practices introduced by Loblaw after its acquisition of Shoppers Drug Mart in 2014 created “risks to patient safety and pose a significant risk of causing patient harm.”

Some of those practices, according to the lawsuit, include imposing targets on the volume of “MedsCheck” appointments– Ontario’s medication review service – and minimizing support staff hours in an effort to increase revenue and decrease costs.

The claim notes that Shoppers Drug Mart can and has terminated its contracts with franchise owners who “breach key obligations” or criticize their business decisions.

Sivajanan Sivapalan, an Ontario pharmacist and lead plaintiff in the suit, entered an agreement with Shoppers Drug Mart to run a franchise in Beamsville, Ont. in 2011. He subsequently renewed his agreement in 2014, 2017, and 2020.

The suit alleges, after Sivapalan “expressed concerns” regarding the corporate practices to Shoppers Drug Mart, his agreement was terminated without reason on Jan. 23, 2023.

Moreover, since Shoppers Drug Mart was acquired by Loblaw, franchise owners say they have expressed concerns about the corporate policies and their “increased risk to patient safety.” But the claim argues that Shoppers Drug Mart and Loblaw have taken “little to no action” to address the concerns.

Following a meeting on March 25, the Ontario College of Pharmacists (OCP) announced a “zero tolerance” policy for business practices that impede pharmacists “ability to deliver effective care” after hearing from “thousands” of pharmacy professionals.

In a news release, which does not name any pharmacy retail chain specifically, the OCP said it found the reports of “inappropriate pressure” to conduct MedsCheck appointments “deeply troubling.”

“The College will consider every tool available to us to address those concerns,” the OCP said.

To that end, the claim says the OCP policy puts franchise owners at “increased risk of regulatory scrutiny and sanction” from Shoppers Drug Mart.

“Our high-level goal is to seek justice for Shoppers Drug Mart franchisees - pharmacists - who have been forced to practice under corporate policies that place them in an irredeemable conflict of interest, which affects their ability to provide safe and effective patient care,” lead counsel Andrea Sanche told CTV News Toronto in an email.

When asked for comment on the suit, Loblaw told CTV News Toronto that the case has “no merit, whatsoever” and the company plans to “vigorously defend” itself.

The class-action is seeking, among other things, damages for Loblaw’s alleged breaches of contract with currrent and former franchise owners, the amount of which has yet to be determined.