Fired secretary files suit against Starkey; company accuses her of theft

A fired longtime secretary at Starkey Hearing Technologies has initiated the latest high-stakes exchange of accusations with the company, demanding severance pay and being accused in turn of having dipped into a "secret executive account.' "

Julie Miller, a 39-year Starkey employee and former executive assistant, sued Starkey late Wednesday, accusing the firm of breaching her employment contract and dismissing her for being married to a Starkey official who was fired.

The company responded Thursday by accusing Miller of receiving "hundreds of thousands of questionable payments" from the secret account, which it wouldn't detail.

For Starkey, the litigation is just the latest chapter in still-unfolding drama featuring lawsuits and countersuits between the company and several former executives and employees. Several lawsuits accuse owner Bill Austin and some family members of improprieties at the hearing-aid maker, while company officials accuse the fired executives of engaging in wrongdoing.

Even as the litigation battles intensify, Starkey is continuing its long practice of promoting itself with lavish events. Austin and company leaders gathered Thursday along with 3,200 Starkey distributors and employees in Las Vegas at the company's multimillion-dollar Starkey Innovation Expo. The event, which celebrates Starkey distributors, will feature former presidents George W. Bush and Bill Clinton, Magic Johnson and Ben Affleck among its speakers, with music from the Beach Boys.

Last week, Starkey accused fired President Jerry Ruzicka of stealing millions after he filed a whistleblower lawsuit alleging that Austin retaliated against him and withheld past and future wages.

Miller, who was Ruzicka's executive assistant, contends her employment contract was not due to expire until August 2017. Miller was terminated in September, along with Ruzicka, five other top executives and a second executive assistant named Kim Mohlis.

Miller is seeking in excess of $50,000, plus attorney fees.

Her lawsuit is the fourth filed against Starkey by fired employees since Sept. 8, the day that Starkey began its sudden internal purge.

Miller's husband, Larry Miller, was Starkey's vice president of human resources. He also was fired in September.

In her lawsuit, Miller said that she lost her job "without good reason," while the executive assistants of other fired employees were allowed to remain with the company. Those assistants were not married to Starkey executives, she said.

As a result, Miller accuses Starkey of "marital status discrimination," and of violating the Minnesota Human Rights Act.

In response, Starkey attorney David Bradley Olsen said: "Starkey Hearing Technologies is surprised to have received the complaint filed by Ms. Miller … especially given that it appears she received hundreds of thousands of dollars in questionable payments to a secret 'executive' account. Starkey denies that she is entitled to recover on any of her claims."

Miller's attorney, John Fabian, said the lawsuit shouldn't have come as a surprise "because she informed Starkey of her claims in October 2015 and afforded Starkey the opportunity to resolve her claims without litigation," Fabian said. "Starkey's contention that Ms. Miller, a faithful Starkey employee for more than 39 years, engaged in wrongdoing involving questionable payments to a 'secret executive account' is both untrue and retaliatory."

Olsen said he could not provide further details about the secret fund because of an ongoing federal investigation into possible wrongdoing by Starkey's former executives.

That investigation included a raid in November of Ruzicka's home and the questioning of several fired and current employees.

In Ruzicka's whistleblower suit filed last week, he accused Austin, Austin's stepson, Brandon Sawalich, other family members and the company of diverting millions of dollars from the company, of weakening its Employee Stock Ownership Program, and of submitting false tax write-offs and altered documents.

After the lawsuit's filing, Olsen issued a statement saying Ruzicka had stolen millions from Starkey over a period of years.

An October lawsuit filed by fired Starkey Operations head Keith Guggenberger accused Austin of firing executives, managers and assistants with close ties to Ruzicka in retaliation for Ruzicka refusing to promote Sawalich and for making plans to start another company once his employment contract expired this month.

Guggenberger's lawsuit accuses Sawalich, the senior vice president of sales, marketing and customer service, of conspiring with Austin and others to undermine Ruzicka so that Sawalich could position himself as Austin's heir.

A former Starkey Foundation manager, Maria Boys Smith, filed suit last month accusing Starkey of commingling its nonprofit and for-profit funds and of inflating its hearing aid donations to boost its tax write-offs.

FBI agent Kyle Loven declined to comment on the investigation.