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Lawsuit: Starkey firings were retaliatory

MINNEAPOLIS — A new lawsuit alleges officials at Starkey Hearing Technologies were fired last month in retaliation after the stepson of the company's chief executive wasn't promoted.

The lawsuit filed Friday alleges breach of trust, defamation of character and spying. It also alleges that chief executive Bill Austin created a hostile work environment. The lawsuit, filed by former operations vice president Keith Guggenberger, seeks damages in excess of $10.9 million.

A public relations official said in an email to The Associated Press on Saturday that Austin would not be making any comment. Starkey's attorney, David Bradley Olsen, also said he had no comment at this time. A message left at the home of Austin's stepson wasn't immediately returned to the AP on Saturday.

Guggenberger, who worked at Starkey for 29 years, says he was wrongfully terminated and is owed $1.2 million in wages plus benefits. Former company president Jerry Ruzicka and six other employees were also fired.

In the industry, Ruzicka and Guggenberger are largely credited with helping build Starkey's hearing aid business to a company with $800 million in annual revenue. The court filing said "Ruzicka's role in building the company ... was even greater than Austin's."


But the lawsuit said Austin marginalized Ruzicka after Austin's stepson, sales and marketing senior vice president Brandon Sawalich, wasn't promoted. The lawsuit alleges Austin began yelling and bad mouthing Ruzicka and Guggenberger around the office, and that Austin "detests any limitation on his authority and power in the company."

The complaint said that once Ruzicka believed his employment contract wasn't going to be renewed, he made plans to leave Starkey and start his own company. The lawsuit said Sawalich learned of this and arranged to intercept emails between Ruzicka and Guggenberger.

The lawsuit alleges that Austin began terminating executives on Sept. 8 and 9, targeting those close to Ruzicka.

Ruzicka's attorney, Marshall Tanick, said his client did nothing wrong.

Austin fired Guggenberger on Sept. 9, accusing him of planning to open a competing business with Ruzicka. Guggenberger told Austin he had no intention of leaving, but he received a termination letter anyway, alleging a list of "groundless" offenses, the lawsuit said.

Guggenberger's attorney, Mark Briol, said his client didn't want to leave Starkey.

"He had no intention of doing anything against the company. He was not feathering his own nest. He was not looking to compete with Starkey. He was not going anywhere. He (still) had a 13-year contract worth $375,000 each year. It was Jerry who was the one who was looking," Briol said.

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