The recently fired president of Starkey Laboratories is suing the company, claiming he was wrongfully terminated and defamed after reporting wrongdoing by company founder William Austin and vice president Brandon Sawalich, Austin’s stepson.
Jerry Ruzicka filed suit against the Eden Prairie maker of hearing aids Friday in Hennepin County District Court. Separately, he filed for arbitration over millions of dollars in deferred compensation he says he is owed under his last 10-year contract.
Ruzicka was fired and escorted from company property Sept. 8. A company communication shortly afterward said Ruzicka was the subject of “an ongoing investigation,” and Ruzicka’s home was searched by the FBI and other federal agencies Nov. 4.
In his lawsuit, Ruzicka claims he was terminated because he reported improprieties by Austin and Sawalich to company executives. He said Austin falsely claimed to be a resident of Texas to avoid paying Minnesota taxes and once told Ruzicka that, in business, there should be two documents: one kept in the drawer and the other for the tax man.
Ruzicka claimed the company spent millions on endeavors that had no commercial value, including $50 million on unprofitable TV and film productions by another of Austin’s stepsons. Austin and Sawalich diverted company funds to another Sawalich business in Illinois, remodeling Sawalich’s home and frequent non-business travel, Ruzicka’s suit alleges.
The suit also says Austin fits hearing aids for clients even though he is not licensed to do so in Minnesota. That activity has led to claims in excess of $4.5 million for damage to customers’ ears, Ruzicka said.
Following Ruzicka’s termination, Austin and Sawalich told company employees that Starkey had been the victim of wrongdoing and criminal behavior by Ruzicka, the lawsuit says.
Starkey attorney David Bradley Olsen on Friday said that after the November raid on Ruzicka’s home, the FBI notified the company that it was the victim of possible criminal activity.
“We are confident that the investigation will show that Ruzicka abused the trust that was placed in him by, among other things, stealing millions of dollars from the company and its employees over a period of several years,” Olsen said in a statement to media. “Ruzicka’s civil lawsuit will succeed neither in diverting attention from his own conduct nor delaying the inevitable.”
Ruzicka claims Austin and Sawalich want to diminish his credibility because they knew he explored going into business distributing hearing aids after his Starkey contract ended in January 2016.
“Mr. Ruzicka has continually denied and continues to deny that he committed any improprieties or wrongdoing and believes that the accusations made by Starkey, and now Starkey’s attorney, are false, inaccurate and defamatory,” said Ruzicka’s attorney Marshall Tanick. “They compound the harm he has suffered because of the wrongful termination.”

Jaime DeLage

Jaime DeLage joined the Pioneer Press in October 2013 as an editor for and jumped to a reporting position on the breaking news team in April 2015. DeLage has worked as a journalist in Minnesota for more than 20 years. He started out in 1994 at the Northern Light in Williams, Minn., and took a job as northwestern Minnesota reporter for the Grand Forks (N.D.) Herald in February 1997. He was part of the Herald staff that earned a Pulitzer Prize for its continuing coverage of the flood of 1997. He moved to the Herald’s sister paper, the Duluth News Tribune, in 2007 to serve as night editor. DeLage is a graduate of Crookston (Minn.) Central High School and St. John’s University in Collegeville, Minn. He served in the Peace Corps in Botswana and Namibia.