The former vice president for clinical & regulatory affairs at Wright Medical (NSDQ:WMGI), who left under a cloud in 2011, is suing her former employer in a bid to win severance pay.
Alicia Napoli was part of a purge of Wright executives in April and May of that year that saw then-CEO Gary Henley abruptly resign and then-CTO Frank Bono fired. Napoli, senior vice president, general counsel and secretary Raymond Kolls and senior vice president for EMEA commercial operations Cary Hagan left a month later.
At the time Wright said the latter trio resigned “without good reason," meaning it would not have to cover the terms of their severance agreements.
Bono and Napoli sued Wright in 2012 in a Missouri state court, asserting claims for retaliatory discharge, breach of contract, defamation and wrongful discharge, according to a regulatory filing. Napoli voluntarily dismissed that claim in October 2013, but early last month she filed a new complaint with the U.S. District Court for Eastern Missouri.
Napoli’s lawsuit claims that she was 1 of the Wright representatives who inked a product research and study contract with Dr. Paul Lux, a St. Louis orthopedic surgeon, in July 2010.
"In approximately August 2010, Wright Medical investigated Ms. Napoli for possible compliance violations with respect to the above surgeon’s contract," according to the complaint. "From its investigation, Wright Medical found a purported appearance of impropriety involving Ms. Napoli, but no violation of law."
Wright issued a letter of reprimand in March 2011, according to the lawsuit, which alleges that "Napoli’s actions in connection with the surgeon’s contract were at all times performed with the knowledge and consent of authorized representatives of Wright Medical."
"Thereafter, without prior notice or justification, Wright Medical delivered a purported letter of resignation to Ms. Napoli on May 3, 2011, with a demand for her to sign it, or be terminated under threat of a negative press release," according to court documents. "Ms. Napoli signed the purported letter of resignation under compulsion and duress, without benefit of counsel."
The lawsuit argues that the allegedly forced resignation amounts to an involuntary termination that should have triggered her separation pay package. Napoli is seeking an award "that would compensate her for all severance benefits," pre-judgment interest and legal costs and fees, according to the documents.
In October 2010, Wright agreed to pay nearly $8 million to settle federal charges that it used consulting gigs for physicians to funnel alleged kickbacks to the docs. The feds later charged accused the company of breaking the plea deal, after Wright revealed that an internal probe had found "credible evidence of serious wrongdoing," according to regulatory filings.
The surprise shakeup that ensued saw the abrupt resignation – also without severance – of former CEO Henley and the outright firing of Bono, who was discharged "for failing to exhibit appropriate regard for the company’s ongoing compliance program." Napoli, Kolls and Hagan resigned the next month.