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Lawsuit Against Starkey Seeks $11M in Damages

Starkey's former operations vice president, Keith Guggenberger, accuses his former employer of spying on him, defamation of character, and breach of contract.

Nancy Crotti

Even step-blood is thicker than water.

That's what a recently fired executive alleges in a lawsuit filed last week against global hearing aid developer and manufacturer Starkey Laboratories Inc.

Starkey (Eden Prairie, MN) axed its president, Jerry Ruzicka, in September after Ruzicka refused to promote company CEO Bill Austin's stepson, according to the lawsuit, filed in Minneapolis.

Starkey dismissed seven other employees, including the plaintiff, former Starkey operations vice president Keith Guggenberger, claiming that Guggenberger had planned to leave Starkey for a competitor started by Ruzicka, the suit says. Guggenberger acknowledges an email exchange with Ruzicka about a startup, but maintains in the suit that he made no formal plans to leave.

Guggenberger had signed a 13-year employment contract with Starkey in December 2014, according to the suit. "He needed the security and health benefits provided by his agreements with Starkey to care for his family, including his autistic adult son," it adds.

Guggenberger is demanding more than $11 million for alleged breach of contract, defamation, and unpaid wages.

The suit describes a hostile working environment at Starkey, maintaining that company founder Bill Austin routinely lashes out and yells at employees. 

Ruzicka had refused in December 2014 to promote Austin's stepson, Brandon Sawalich, president of Starkey's U.S. operations, according to the suit. In the ensuing months, Ruzicka started planning for his future after Starkey when he recognized that the company "might not renew his employment contract" in 2016, the suit says.  He had worked for Starkey since 1977.

Guggenberger had reported to Ruzicka for the entire 29 years that he worked for the company.

"His operational acumen and successful performance in several roles at Starkey contributed substantially to Starkey's growth from $60 million to $800 million during Guggenberger's tenure," the suit says of the plaintiff.

Starkey operates 21 facilities and conducts business in more than 100 markets worldwide. It lists its employee numbers in the 1001 to 5000 range on LinkedIn. The 52-year-old company develops, manufactures, and distributes hearing aids through the Audibel, NuEar, MicroTech, AudioSync, and original Starkey brands. It declined to comment.

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