MINNEAPOLIS (WCCO) — A new lawsuit claims it was a power struggle involving the stepson of Starkey Laboratories Founder Bill Austin that led to the firings last month of top company executives.
The lawsuit says the eight long-time employees were fired as retaliation because one of them refused to promote Austin’s stepson to president of the company’s U.S. operations.
Brandon Sawalich is Austin’s stepson and the son of Austin’s wife, Tani Austin.
The lawsuit says Starkey President Jerry Ruzicka refused to promote Sawalich from his current job as senior vice president of sales and marketing because Sawalich was not qualified.
The lawsuit paints an unflattering portrait of both Austin and his stepson.
Filed by Starkey’s former senior vice president Keith Guggenberger, the document says that Sawalich “spends the company’s money like water” and that Austin would lash out and yell at employees.
Guggenberger is asking for damages in excess of $10.9 million.
The lawsuit says that Sawalich never graduated from college and uses Starkey funds to support a lavish lifestyle, including a 40th birthday party at George Washington’s home in Mount Vernon. Guests from around the country attended and allegedly traveled on the company’s expense.
The lawsuit says Austin’s public persona of caring only for his hearing aid patients and having celebrity friends help him raise money to provide hearing aids for the poor is in sharp contrast to his harsh treatment of employees.
Attorney Marshall Tanick represents Ruzicka, the executive who refused to promote Sawalich, and he says the Guggenberger lawsuit claims are essentially accurate.
He said that a Starkey statement after the firings saying there was “an ongoing investigation” into the fired employees was defamatory by suggesting the employees had done something wrong.
Tanick also agreed with the Guggenberger lawsuit’s point that it was the fired executives who built Starkey into the $800 million company it is today.
Austin has said publicly that he devotes himself almost exclusively to fundraising and patients and has almost nothing to do with the business side of the company.
In July 2015, Austin told WCCO-TV that he hasn’t written a check since August of 1970.
“I don’t know who writes my checks,” he said then. “I have no idea and I don’t care.”
Tannick says he and his client have not yet decided whether they will file their own lawsuit.
WCCO-TV reached out to Starkey on Monday but did not hear back.
The company has not yet filed a response to the lawsuit in court.
None of the other fired employees have taken any kind of legal action.