Ousted Orthofix Execs File Court Challenge

Three former Orthofix executives have filed an application for arbitration with the California Superior Court asking, among other things, to compel Orthofix Medical, Inc. to address their claims surrounding their abrupt dismissal in September 2023.

According to the claimants, under their Dispute Resolution Agreement [DRA] with Orthofix Medical, Inc., they are entitled to an arbitration hearing.

The application was filed against Orthofix Medical, Inc., former interim CEO Catherine Burzik and Wayne Burns, a member of Orthofix’s Board of Directors as well as its audit and finance and compliance and ethics committees.

The claimants are former Orthofix Chief Executive Officer Keith Valentine, former Orthofix Chief Financial Officer John Bostjancic, and former Orthofix Chief Legal Officer Patrick Keran [collectively the “executives”].

The three former Orthofix executives are asking the court to do a number of things.

• First, per the application, “appoint the same neutral arbitrator to hear Petitioners’ arbitration demands.” The executives claim that since December 2023 they have been trying to get Orthofix to agree to an arbitrator as required by the DRA. They allege that these efforts have failed and that under the DRA the court can appoint the arbitrator.
• Second, they claim that the court can and should appoint one neutral arbitrator to oversee the matter. The executives are asking the court to “relate Petitioners’ arbitration demands before the same neutral arbitrator.”
• Third, the executives are asking that the court “consolidate Petitioners’ arbitration demands to be decided in a single arbitration proceeding before the same neutral arbitrator appointed by the Court.”

The executives assert that Orthofix seeks the appointment of separate arbitrators to hear the separate arbitration demands and they’ve asked that their arbitration claims be heard by the same arbitrator because their arbitration demands allegedly “arise from the identical Severance Agreements and the same transaction, and involve identical claims, witnesses, evidence, parties, dates and events and common issues of law or fact, and are governed by the DRA, so that it would be unfair and inefficient, and unduly risk conflicting rulings if they were heard by different arbitrators.”

The executives claim that Orthofix opposes consolidation because it is allegedly not permitted under the DRA. However, the executives argue that the DRA only prohibits class actions, not “consolidation of virtually identical claims.”

The executives are also asking that the court compel Burzik and Burris to arbitration.

It appears that Burzik and Burris are claiming that they have not consented to arbitration.

The executives claim that under the DRA employment claims must be submitted to arbitration whether those claims are brought against the company, its officers, or its directors.

The executives claim that interpreting the arbitration provision as not reciprocal “runs counter to the law and is both illogical and unfair.”

In September 2023 Orthofix announced its leadership change. According to the company, the decision to terminate the executives was “for cause” and was a “unanimous decision” by the Orthofix Board’s independent directors. For OTW’s original coverage of the termination of the Orthofix executives, see “Purge at Orthofix.”