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Starkey whistleblower lawsuit may go through arbitration

On Behalf of | Jan 27, 2016 | Firm News |

We previously wrote about a whistleblower lawsuit filed against a foundation associated with Minnesota-based hearing aid manufacturer Starkey Laboratories. The basis of that lawsuit is the alleged wrongful termination of an employee who reported concerns about the legality of the foundations reporting of charitable activities, among other things.

Former Starkey president Jerry Ruzicka has also filed a wrongful termination lawsuit, though against Starkey Laboratories rather than the foundation, in connection with his own whistle-blowing activities. Ruzicka had previously accused the company head or his family members of making personal use of company funds, violating tax law, and other wrongdoing. 

The allegations are complicated, with the company also accusing Ruzicka of stealing millions of dollars from the company. Ruzicka is not the only fired executive that has filed a wrongful termination suit—former chief operating officer Keith Guggenberger has also done so.

In Ruzicka’s case, commentators have said that it is likely that Starkey will request arbitration to sort out the allegations. Corporations very often include arbitration agreements in employee contracts, though sources didn’t say whether that is the case with the former Starkey executives.

Arbitration, it is well known, often benefits employers due to the fact that it is all too common for bias toward employers to creep in and because the inability to access the court system deprives employees of important protections. In our next post, we’ll continue looking at the issue of arbitration agreements in employment disputes and things to keep in mind before signing an arbitration agreement with an employer. 

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