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Servotronics leader resigns following investigation

"He committed willful malfeasance"
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Posted at 12:11 PM, Dec 28, 2021

ELMA, NY (WKBW) — The leader of Servotronics, Inc. in Elma has resigned amid sexual harassment and other allegations.

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Outside Servotronics in Elma.

The company issued a news released Monday saying Kenneth Trbovich resigned as CEO and president and was removed as chairman of the Board, “after a nearly six-month-long internal investigation identified grounds for his termination.”

The company says Monday’s announcement, which was first reported by The Buffalo News, follows an internal investigation that was authorized by its board on June 8th when Trbovich was placed on administrative leave, a day after a former employee filed a civil complaint against the CEO’s conduct.

An independent, outside counsel conducted the investigation.

A 102-page complaint filed in State Supreme Court in June outlines allegations made by former employee Deneb Pirrone.

Among the allegations, it accuses Trbovich of engaging in “a pervasive pattern of severely offensive and relentless sexual harassment of male employees like Pirrone.”

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Allegation in complaint.

It also accuses him of sexually harassing female contractors with the company.

The complaint also states male employees were forced to “visit brothels and engage with prostitutes while on overseas business trips” and forced employees and customers of the company to visit strip clubs.

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Allegation in complaint.

According to the Servotronics news release, Trbovich was informed on December 1 that “grounds for termination” were identified during the investigation. A December 22 board meeting was scheduled to hear from Trbovich, but he issued his resignation the day before.

“At its Dec. 22 meeting, the Board accepted his resignation, removed him as Chairman, and based on the findings of the investigation determined that he committed willful malfeasance that would have justified termination. The Company has not disclosed other findings of the investigation, as they relate to personnel matters.”

Matthew Miller, Pirrone's attorney, said the complaint contains nearly 20-claims

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Attorney Matthew Miller.

“Ranging from overt sexual harassment to sexual discrimination to aiding and abetting all of that type of conduct, as well as claims by my client on behalf of the other shareholders of Servotronics,” Miller explained.

Servotronics said while its board of directors conducts a search for a permanent replacement it has named James Takacs, chief operating officer, to take over responsibilities of the CEO and president.

The Board's non-employee directors stated: "Our highly skilled workforce and experienced management team have ensured that Servotronics continues to deliver on its reputation for meeting and exceeding government, defense, commercial, consumer and other customers' high standards for quality and reliability, which has been built over more than six decades. This team has delivered sequential sales growth in the second and third quarters of this year, while continuing to invest in people, product development, and production capabilities that are designed to position Servotronics for the future. We look forward to providing Jim Takacs and his team with the resources they need to continue executing, while the Board conducts an active search for a new CEO."

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Attorney Matthew Miller in Zoom interview.

“What is the reaction from yourself and your client, now that we're hearing that he did indeed resign?” Buckley asked.

“It’s confirmation that there's veracity and merit in the allegations that we put forth,” replied Miller.

“What I think is the most striking Eileen, is that the company itself in its public federal filing with the SEC has made it know that it determine that his conduct was willful malfeasance, which means intentional wrongful conduct."

Trbovich remains a director to the board. However, the company states it “does not intend to renominate him for election to the Board at the 2022 annual meeting of shareholders.”

Trbovich's attorney Robert Boreanaz for comment wrote in an email that he was on vacation and out of town. But he did offer a brief statement saying his client's "recent resignations will remain personal for now".

"His actions have always been motivated by the by the best interest of the corporation, it's staff and shareholders," wrote Boreanaz.

Miller says at this point they are waiting for a judge to rule on the company's request to have the case dismissed.

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Inside Servotronics.

Servotronics is a publicly traded company. The company designs, develops and manufactures parts for airplanes, jet engines and military jets. It also designs and manufactures cutlery and pocketknives.

It employs 340 employees with an annual revenue of $55.3 million.