Walter Eisner • Mon, Jan 23rd, 2012
second former Wright Medical Technology Inc. senior executive has filed a lawsuit against the company for, “breach of contract and retaliatory discharge.”
OTW has obtained a copy of the lawsuit filed on January 5 by Cary Hagan, the company’s former vice president, Commercial Operations for Europe, the Middle East and Africa.
Frank Bono, the company’s former senior vice president and chief technology filed a similar lawsuit in early January. Both men claim that they were either discharged or forced to resign to demonstrate the company’s cooperation with the federal monitor imposed on the company by a deferred prosecution agreement (DPA) with the New Jersey U.S. Attorney.
Hagan alleges that his forced resignation was in retaliation for raising documented concerns at a special board meeting about Lisa Michels, Wright’s former chief compliance officer, and her inability to run an efficient and effective compliance department. Wright, unlike other orthopedic companies under similar DPAs, had negotiated a 12 month monitor period. The other companies’ monitoring programs lasted 18 months. Wright eventually agreed to extend the DPA for one additional year and Lisa Michels left the company.
According to Hagan, James Tucker, the federal Monitor hired to oversee the company’s compliance program, was opposed to paying terminated employees severance pay. He claims, Wright’s then CEO, Gary Henley, “attempted to ensure, to no avail,” that Wright comply with employee severance agreements, as well as Wright’s “general mismanagement” of it’s compliance program.
As in Bono’s lawsuit, Hagen alleges that the company was far more concerned with the appearance of compliance than it was with actually complying with applicable laws and regulations. Bono’s complaint also claims he and his coworkers were terminated in an attempt to “shore up stock prices by eliciting positive review from the federal monitor.”
We will report on the two Complaints in detail in the next issue of OTW.