Rite Aid Loses Ethics Chief, Shifts Work From Family-Tied Firms

Rite Aid Corp. parted ways with its ethics chief after seven months and disclosed it moved legal work away from law firms that had family ties to top executives.

LaShon Kell, who was also in charge of compliance and internal audits, “is no longer an associate of Rite Aid,” said an auto-response message from her company email account. Neither Rite Aid, which had touted Kell’s hire as a senior vice president, or Kell responded to a request for comment.

Rite Aid disclosed June 10 a sister of Paul Gilbert, the company’s chief legal officer, works at Bradley Arant Boult Cummings, which received $250,000 for work in fiscal 2022. A brother of Matthew Schroeder, its chief financial officer, is a partner at Littler Mendelson, which received $391,000 in the period, Rite Aid said.

The work was at an “arm’s length basis” and predated Gilbert’s position at the company and Schroeder becoming an executive officer, according to a proxy statement filed last week. Rite Aid moved the Bradley Arant and Littler work to other firms last year so “related persons” didn’t have “a material interest,” the company said.

The drugstore chain, based in Camp Hill, Pa., has been trying to pivot toward a pharmacy benefit manager business as it copes with a downgrade of its credit rating, competition from rivals, and lawsuits over opioid painkillers.

Rite Aid is seeking to trim its debt load by buying back up to $150 million in bonds, Bloomberg News reported June 14.

The firm Bradley Arant did opioid-related litigation matters for Rite Aid, according to the proxy. Littler handled employment-related matters, the company said.

Littler had a role in roughly 6% of cases involving Rite Aid in US federal courts within the past five years, according to Bloomberg Law data.

Kell’s Role

Kell joined Rite Aid after more than a half-dozen years at health insurer Humana Inc., where she was most recently an assistant general counsel tasked with internal investigations and litigation tied to health care fraud.

She previously held an anti-corruption and international compliance role at Halliburton Co. in Houston and spent more than a decade in private practice at the law firms Bracewell and Venable.

Kell began her career as a staff attorney in the US Securities and Exchange Commission’s enforcement division.

Kell’s auto-response message directs people to other lawyers and compliance professionals at Rite Aid, including Alyssa Parrish, the company’s newly promoted vice president of corporate legal. Parrish handles compliance-related questions for Rite Aid’s Health Dialog business, according to the message.

The message also directs people to Gilbert, a former Epstein Becker & Green partner who was hired in 2020. Gilbert replaced former general counsel James Comitale, now the top lawyer at Harrisburg, Pa.-based discount chain Ollie’s Bargain Outlet Inc.

Gilbert received more than $1.9 million in total compensation during fiscal 2022, including roughly $1 million in cash, Rite Aid disclosed in its proxy filing. He owns Rite Aid stock currently valued at roughly $346,000, according to Bloomberg data.

Parrish and Gilbert didn’t respond to a request for comment about Kell’s exit. Nor did Christin Bassett, a former Reed Smith partner hired by Rite Aid last year to be its vice president of litigation.

Bassett was promoted to deputy general counsel in May, according to her LinkedIn profile. Kell’s LinkedIn profile shows that she left Rite Aid in April.