Were Orthofix Execs Terminated for Texts?

Last year three top Orthofix executives were purportedly fired for “cause.” Recent court filings reveal their terminations may have been attributed to texts sent before they were even hired by Orthofix.

OTW recently published an article covering the arbitration filings filed by the ousted executives. For OTW’s coverage of the arbitration request filings, see “Ousted Orthofix Execs File Court Challenge.”

What OTW didn’t cover in the article is the purported “why” behind the firings. 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”] were terminated from Orthofix on September 11, 2023.

In the Orthofix September 12, 2023, press release announcing the leadership changes, the termination of the executives was purportedly “for cause.” In the press release, Orthofix states that its BOD’s decision was based on “an investigation conducted by independent outside legal counsel and directed and overseen by the Company’s independent directors.” From the investigation the BOD allegedly “determined that each of these executives engaged in repeated inappropriate and offensive conduct that violated multiple code of conduct requirements and was inconsistent with the Company’s values and culture.”

What was allegedly so “inappropriate and offensive” that it necessitated the termination of three executives? According to recent court filings by the executives, it may be a handful of texts sent prior to their employment with Orthofix.

A little background. On January 5, 2023, Orthofix Medical Inc. and SeaSpine Holdings Corporation completed their merger of equals. Around that time the executives took their leadership roles with Orthofix. Sometime in June 2023 the executives purportedly signed their severance agreements which included a dispute resolution agreement. The agreements allegedly covered what would be considered termination “with cause” and “without cause” as well as the severance amounts.

According to Valentine’s declaration in his arbitration filings, he claims that “In conjunction with our [the executives] terminations, Orthofix sent us virtually identical written notices of termination. The only ‘conduct’ identified by the Company as the cause’ for our termination were ‘business-related text messages’ sent privately and solely between me, Bostjancic and Keran that were wholly unrelated to the business and compliance issues that were the subject of the internal investigation.”

Valentine continued, “Of the 6,718 text messages collected from our phones, Orthofix identified and provided twenty-four texts exchanges it deemed ‘highly offensive’; of those twenty-four, eighteen were written even before I was employed by Orthofix and all but one of which predated my June 19, 2023 Severance Agreement. All of them were exclusively and privately communicated solely between me, Bostjancic and/or Keran. There were no third-party recipients of any of these texts. No recipient objected to their contents or expressed that the texts were unwanted.”

OTW will continue to cover this matter as information becomes available.