DENVER -- Jiffy Lube International Inc. terminated eight Denver-area franchises held by Colorado Lubrication Inc. last week after a Denver Post article detailed allegations by current and former Colorado Lubrication employees from three stores who said they were instructed to tell customers that they put Pennzoil in their cars even though they used a less-expensive oil. The news broke just as Shell announced that it was purchasing Pennzoil-Quaker State, which owns the Jiffy Lube chain.
Colorado Lubrication Vice President Jerry Whitcomb acknowledged that the company had not been using the Pennzoil. Dirk Sparks, manager of one of the Jiffy Lube locations, said the practice had been going on for a year, but Whitcomb said he was aware of it happening only for the past four months. He denied, however, that he told employees to lie.
Whitcomb told the Post that the company began buying oil from Silco Distributing Co. and later Unocal 76 after the company fell $1 million in debt to Pennzoil in December and Pennzoil refused to deliver oil to the stores unless Colorado Lubrication paid cash on delivery. He said Unocal 76 is less expensive. Pennzoil costs $5.18 a gallon, while Unocal 76 costs $2.82 a gallon, according to the paper.
Jan Zavislan, deputy state attorney general for consumer protection, said misrepresenting the quality, brand or ingredients of a product is a violation of the state’s consumer fraud laws. Each documented case of consumer fraud carries up to a $2,000 fine, to a total of $100,000. But if consumers are older than 60, the fine rises to $10,000 per incident, and there is no cap, Zavislan told the paper.
Franchisees of Jiffy Lube stores are independent businesses, and Jiffy Lube cannot dictate what brands of oil the franchises use, Mike Lawrence, a spokesperson for Jiffy Lube, told the Post.
Jiffy Lube acted quickly once the allegations surfaced. The stores, which have been closed since last week, were scheduled to reopen yesterday under management by Jiffy Lube with Pennzoil products, said Cindy Landers, a spokesperson for Jiffy Lube, in a press statement.
"We are troubled by allegations…that employees misrepresented the brand of motor oil they were using," Landers said. "Although it appears that the motor oils used in that service center met or exceeded the requirements of auto manufacturers, Jiffy Lube International firmly believes that any misrepresentation to customers is unacceptable."
Colorado Lubrication employees who spoke out about company practices said they were concerned about keeping their jobs. "It's false advertising," Sparks told the paper. "They need to quit ripping people off." He added, "We were honest. We changed a major corporation. We're all good workers."
Landers said she could not comment specifically about company plans involving employees. "We are going to do absolutely the right thing," she told the paper.
