Fired Starkey Hearing Technologies president hires lawyer

The ousted president of Starkey Hearing Technologies has hired prominent Twin Cities employment attorney Marshall Tanick to represent him after he and three other Starkey executives were abruptly fired Tuesday.

In a phone interview Thursday, Tanick confirmed that he was hired by former Starkey President Jerry Ruzicka, who had been with the firm for 38 years and is largely credited with leading its growth.

"I just got the case yesterday and it is my hope that we can find a fair, amicable and prompt resolution," Tanick said. "Right now we are trying to determine how to proceed."

Starkey Hearing founder Bill Austin sent an e-mail to employees Wednesday saying that Ruzicka, CFO Scott Nelson, Operations Senior Vice President Keith Guggenberger and Human Resources Vice President Larry W. Miller had been "terminated effective immediately" and that there was an "ongoing investigation."

Austin and the company have declined to elaborate.

Tanick said "I am not aware of any investigation internally or externally or of any alleged wrongdoing on the part of Mr. Ruzicka," who is 58. He became president at age 29.

The other executives did not return phone calls seeking comment Thursday.

Minneapolis employment attorney Aaron Hall, who is not representing any of the Starkey executives, said it wouldn't be unusual for company management to cite an ongoing investigation as reason for not talking publicly about terminations of high-ranking executives: "I imagine they are still determining what has happened as they sort through e-mails," Hall wrote in a message.

Two executive assistants were also fired Tuesday — Julie Miller, a 40-year employee who is married to Larry Miller, and Kim Mohlis, who was a 37-year employee.

Mohlis told the Star Trib­une on Thursday that her firing was a "total surprise. I did not expect this." She said she did not know why the firings occurred but said it might have been a power struggle between her boss, Ruzicka, founder Austin, and Austin's stepson Brandon Sawalich, who is Starkey's senior vice president of sales and marketing.

"I think it was a power struggle and we lost. I'm not really sure. This whole situation is pretty strange," Mohlis said. She said she has not yet decided if she will hire an attorney.

Tanick said that Ruzicka "has some significant and substantial [financial] claims that could be made if they [Starkey] are not able to resolve this matter amicably."

It is not uncommon for executives to have employment contracts that allow for hefty severance payments in the event of separation from the company without cause. Because Starkey is a privately owned company, the details of Ruzicka's contract are not public.

Tanick said there is no word of any wrongdoing on the part of his client. "He has contributed greatly to the success that Starkey has had over the time he was president," Tanick said.

The Hearing Review, an industry trade publication, said Ruzicka was the longest-serving president of a major U.S. hearing aid manufacturer. In 2010, he received the Ernst & Young Entrepreneur of the Year Health Sciences Award in the Upper Midwest region.

In interviews, several Starkey employees said they were puzzled about why the firings occurred, adding that they had been told that the company had one of its best years in 2014. At the same time, city leaders in Eden Prairie and industry followers wondered what the shake-up would mean for Starkey long term.

Ruzicka, Nelson and Miller were all longtime executives who were credited with helping to drive revenue from $8 million a year around 1980 to an estimated $500 million a year in 2006.

In a profile published by Bloomberg last year, Austin revealed he has received several offers to buy the company he founded. But he said such a deal was out of the question, because he worried a new owner would not honor the company's values. The story said Austin intended to work at Starkey as long as he is able.

Ruzicka said in past interviews that he thought of Starkey as being on the cutting edge of hearing aid technology. In April, the company received an Edison Award for its Halo hearing aid, which is designed to work with an iPhone. It was Starkey's fourth such Edison Award for innovation in science and medicine.

Austin was largely known for founding the company, providing excellent and personal customer service and for his work overseeing the Starkey Foundation, which provides hearing aids to poor children around the world.

Fred Zimmerman, a retired manufacturing and management professor at the University of St. Thomas, said it remains to be seen how the company will survive the shake-up.

"I feel very badly about what has happened at Starkey. Some of the people who were let go had worked there for many decades and, to the best of my knowledge, they were all stellar performers in building an excellent company," Zimmerman said.

Sawalich, who did not return phone calls seeking comment Thursday, has been involved in Minnesota politics over the years. In 2011, he was considered a leading candidate to become chairman of the Republican Party of Minnesota, and went on to serve as party treasurer from 2013 to 2015. He also served two terms as president of the not-for-profit Freedom Club, which donates money to support conservative candidates for office in the state and nationally.

Dee DePass • 612-673-7725 • dee.depass@startribune.com

Joe Carlson • 612-673-4779 • joe.carlson@startribune.com