Former Employee Rattles Armor All With Lawsuit Alleging Cover-Up

A lawsuit by a former employee has shaken up Armor All Products Corp. with accusations that the company is covering up internal findings that several of its car-care products, including Armor All Protectant, cause tires and air bag covers to crack.

Pritam S. Dhaliwal, a former research manager, contends that the Aliso Viejo, Calif.-based company ignored his warnings about the potential dangers of its products and instead wrongly fired him last year.

Armor All asked a San Bernardino County Superior Court last week to seal the records in the lawsuit that Dhaliwal filed in November over his dismissal. The company argued that confidentiality is needed because details of the accusations would disclose trade secrets unfairly.

Armor All has been a pioneer in the car-care products industry and is one of its major players. It earned $24.5 million in its latest fiscal year, which ended March 31, on revenue of $217 million. The publicly traded company is 57%-owned by McKesson Corp. in San Francisco.

Armor All executives and lawyers refused to comment on the case. The company filed a cross-complaint in March alleging that Dhaliwal violated trade secrets, but its court papers do not state why it dismissed him and when the alleged violations took place.

“Their court filings charge this man with a serious breach of contract. We deny that charge,” said John C. McCarthy of Claremont, Dhaliwal’s attorney. But if the case is sealed, the lawyer said, the allegations “will stay with him” forever.

Dhaliwal was dismissed in February, 1994, when Armor All shifted its research testing to an outside laboratory. Executives, he said in his complaint, told him that he “did not have the personality or management style for the new arrangement.”

Dhaliwal, 54, who holds a doctorate in chemistry from the University of British Columbia, joined Armor All in 1992 to manage a research laboratory. He soon found problems with several products in tests he oversaw and in outside research he came across, according to his suit.

For instance, Dhaliwal says in his suit that Armor All Protectant, the company’s leading product, causes tire walls and vinyl surfaces, such as the covers on air bags, to break down and crack more rapidly than they would without the treatments.

He also alleges that a new product, Armor All Tire Foam, could reduce braking power by dripping into treads of worn or used tires.

In his complaint, Dhaliwal accused the company of continuing to market the products despite his warnings, and he was told not to worry about the results.

Dhaliwal now works for another company, McCarthy said, but the lawyer declined to identify the firm.