- Published on 09 October 2015
Allegations of family power play revealed in lawsuit following dismissal of several top executives at Starkey Laboratories last month.
The sudden dismissals at Starkey were a surprise both within the company and to outside observers. The Eden Prairie-based company (Minneapolis, Minnesota) fired five top executives, including President Jerry Ruzicka, without commenting on the reasons and saying in a statement simply that an investigation was underway and that it was “business as usual” at the company.
Now, Keith Guggenberger, former Senior Vice President of Operations and one of the top staff members who was forced out, has filed a lawsuit against the company. The legal proceedings, started in early October, claim that the execs were fired because Ruzicka had refused to promote founder and CEO William Austin’s stepson Brandon Sawalich. Apparently, Ruzicka refused the promotion on the grounds that Sawalich was not qualified. “From that time on, William Austin marginalized and ignored Ruzicka,” the lawsuit says. “Sawalich began working more directly with Austin and watched for opportunities to remove the main obstacle to his advancement.” The chance allegedly came when Ruzicka started making plans for a new hearing aid distribution business, to be launched after the end of his contract in 2016.
In the lawsuit, Guggenberger’s attorneys accuse Starkey of defamation and breach of contract and are suing for more than USD 11 million in damages. Neither Ruzicka nor two other executives who were fired, Scott Nelson, former Chief Financial Officer, and Larry Miller, former Vice President of Human Resources, are listed as plaintiffs in the lawsuit. Starkey Laboratories has declined to comment at this time.