Family dispute causes upheaval in J.S. West leadership in Modesto

12/03/2013 5:37 PM

12/03/2013 6:25 PM

A family dispute has triggered a management stir at J.S. West and Cos., one of Modesto’s oldest, largest and best-known employers.

For 104 years, James Stewart West and his descendants have run the family-owned firm, which sells propane, mills animal feed, owns hardware and feed stores, raises 1.5 million egg-laying hens and employs 290 people.

Two branches of the family – the Wests and the Bensons – successfully cooperated in running the company for decades, but they’re no longer getting along.

Their tussle for control has ended up in court, where unflattering details of the family dispute have become public, including allegations of unauthorized expenditures and mistreatment of employees.

Eric Benson has been the company’s president and chief executive officer since 2009, and he’s been one of three Bensons on the firm’s six-member board of directors. The other three board members are Wests. They’re all related to one another.

In late October, directors Gary, James and Michael West voted to oust Eric Benson from the company. Even though Eric, Jill and Robert “Bob” Benson voted against that move – making the vote 3-to-3 – Gary West assumed control of the firm, contending that Eric’s vote didn’t count because he had a conflict of interest.

Eric Benson said Gary West had a security guard bar him from entering the J.S. West headquarters at 501 Ninth St. in Modesto, and his access to company computers, equipment and employees was blocked.

So Benson filed a legal action seeking a restraining order to stop the Wests from interfering with his efforts to run the company. According to court filings, Benson contends that because the board was evenly split, the Wests didn’t have the majority they needed to replace him.

The Wests defended their actions, claiming Benson had to be removed for the good of the company. “Eric has always been a challenge to work with,” Gary West stated in a legal response. West was the company’s president and CEO from 1993 until 2009, when Eric Benson took charge.

West said that since 1999, J.S. West had paid for “an executive coach to improve Eric’s interpersonal skills, enhance his communication skills ... and develop his ability and capacity for tact and diplomacy in dealing with our companies’ employees.”

Despite that, West said the company’s senior-level managers recently approached him, saying “they are not willing to tolerate Eric’s mistreatment of them much longer.” West wrote that Benson was criticized for his rude behavior, arrogance, unfairness in paying bonuses and disrespectful attitude.

West’s legal statement also revealed that a recent IRS audit of the company’s tax returns led to the discovery that Benson had flown the company plane on 18 personal flights. West said the IRS had questioned the business purpose of those flights, and Benson ended up agreeing to reimburse the company $70,570.

Benson’s legal filings tell a different story. He said the Wests “concocted a scheme to terminate” him.

Benson said Gary West asked him to resign Oct. 16, claiming Benson had been “disrespectful, dismissive and abusive to subordinates.” Benson said he was shocked by those allegations and was not given time to investigate or resolve those issues.

Instead, Gary West – chairman of the board of directors – called a special meeting Oct. 25 to vote out Eric Benson.

A week later, Eric, Jill and Bob Benson filed a legal action against Gary, James and Michael West. The case is making its way through the court system.

Meanwhile, the J.S. West board reportedly has been deadlocked essentially over everything, including the company’s management structure, ongoing operations, personnel matters and potential business transactions. So, two weeks ago, the court appointed Fred K. Morrison as a neutral “provisional director” to break the deadlock until the company’s internal divisions are resolved.

There is a Fred K. Morrison, a retired California appeals court judge, who now works for a Sacramento dispute resolution service. But his office would not confirm whether he is the Morrison appointed to the J.S. West board.

The board’s meetings are private, so when it meets is not publicized.

Gary West did not return The Bee’s phone message or emailed request for comment Tuesday. Eric Benson told The Bee it would be inappropriate for him to comment at this time.

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