Rothman was sued by its former CEO. The orthopedics giant just sued him back, saying they didn’t owe him severance

A legal dispute over the ouster of Rothman Orthopaedic Institute ex-CEO Christopher Olivia has escalated, with Rothman now claiming in a lawsuit that it does not owe the executive severance because he violated his employment agreement.

The complaint, filed Friday in Philadelphia’s Court of Common Pleas, said the Rothman board fired Olivia in March because he was underperforming and had poor relations with physicians and staff.

“Olivia created a hostile management culture, was intolerant of disagreement, had poor relationship skills, and was the polar opposite of his highly successful CEO predecessor Mike West,” according to the complaint filed by Philip G. Kircher of the Philadelphia law firm Cozen O’Connor.

Rothman continued paying Olivia his $1 million salary through July 24 but balked at paying him severance after discovering during mediation that Olivia had allegedly violated his employment agreement by retaining confidential information about Rothman’s businesses.

Olivia had sued Rothman, also in the Philadelphia Court of Common Pleas, on Oct. 9, alleging that he was wrongfully terminated for blowing the whistle on financial mismanagement at Rothman.

Olivia’s lawyer, George Bochetto, described Rothman’s lawsuit as “complete nonsense” in an emailed response to a request for comment. “The countersuit is a shameful effort by Rothman to deflect its own responsibility and is unbecoming of a professional organization,” Bochetto said.

Kircher and a Rothman spokesperson, Alexandria Hammond, declined to comment on the new lawsuit.

Rothman, which describes itself as the nation’s largest orthopedic group, has more than 50 orthopedic practices with roughly 1,800 employees, in Pennsylvania, New York, New Jersey, and Florida. Olivia’s complaint said the company has about $400 million in annual revenue from its core operations and is owned by 90 physicians.

In their dueling lawsuits, Rothman and Olivia come close to agreeing on why the veteran health care executive was hired in April 2021.

Rothman’s complaint said the company hired Olivia, who had previously been CEO at six health-care firms, “to improve its direction.” Olivia’s lawsuit said he was hired to take Rothman “to the next level.”

Beyond that, there’s disagreement.

Much of Olivia’s complaint focuses on internal “financial improprieties” at Rothman — though private companies like Rothman have very few bookkeeping rules they need to follow beyond paying the proper amount of taxes.

Rothman said in its newly filed complaint that far from improving Rothman, Olivia left it in far worse condition.

In the end, Rothman’s board exercised its right to terminate Olivia without cause.

Under the agreement, filed as an attachment to both lawsuits, Rothman had to keep paying Olivia for 120 days. The agreement also called for Rothman to pay Olivia a $2.53 million termination benefit.

Olivia wanted more, and in June threatened to sue, according to Rothman’s complaint. Olivia’s lawsuit said his allegedly wrongful termination cost him more than $10 million.

Rothman, on the other hand, wanted to claw back more than $1.3 million in bonuses that its lawsuit says Olivia allegedly paid himself in 2021 and 2022 without required board approval.

Then in mediation, Rothman’s lawsuit says it discovered that Olivia had retained confidential information about Rothman’s business practices and plans, including discussions of ways to reform Rothman’s structure and ownership.

Keeping that information violated Olivia’s employment agreement, according to Rothman’s complaint.

Rothman is asking a judge to order Olivia to return “stolen information,” to issue a judgment declaring that Rothman doesn’t have to pay any severance to Olivia, and to order Olivia to pay its expenses associated with the dispute.