Most lawsuits between Plastics Industry Association, former CEO dismissed; judge urges settlement

Update: A judge has ordered mediation between the two parties.

Washington — A federal judge has dismissed most of the lawsuits the Plastics Industry Association and former CEO Tony Radoszewski filed against each other after he was fired in 2022, saying that neither side would likely come out of a trial "looking good."

U.S. District Judge Amy Berman Jackson urged both sides to try to settle, saying in comments from the bench at an online Washington hearing that the case involves a relatively small amount of money and "is not likely to invoke much sympathy from the jury."

Jackson dismissed a lawsuit Radoszewski brought against the association, where he contended he was fired unfairly in March 2022. He had sought one year's salary of $546,000 and miscellaneous costs, for a total of $609,250.

She also tossed out part of a countersuit the association brought against its former CEO and allowed part of it to move forward. But she told the two sides to first try to settle their court fight and avoid a trial.

"It's hard to imagine how anyone would come out of this looking good, given Radoszewski's behavior and [the association's] failure to do anything about it for two and a half years," Jackson said.

In March 2022, the association fired Radoszewski, who had been hired in August 2019, saying that he had not relocated from his home in Texas to the group's Washington headquarters, after court documents say he told the group's leaders in the interview process that he would.

The association's countersuit sought $163,000 in relocation expenses it paid to Radoszewski as part of his employment contract.

Jackson dismissed part of the association's countersuit and said other parts of it could continue, but she also urged both sides to try to resolve it, according to a transcript of the July 20 hearing viewed at the federal courthouse in Washington.

"We could launch into discovery and we could brief motions for summary judgment, which will require all the parties to expend considerable funds to resolve a case that doesn't involve a lot of money and it's not likely to invoke much sympathy from the jury for either side," she said. "I would encourage the parties to think very hard about whether there's a way to resolve this dispute among themselves."

In a brief statement, the association did not address potential settlement talks or next steps and said it wanted to move forward.

“We appreciate the court’s decision and all the work that our team at Keller & Heckman [its attorneys] and [the association] have done on behalf of our members in this matter,” said Tad McGwire, chair of the group’s board and president of Industrial Heater Corp. “We are happy to be moving forward as an association.”

A lawyer for Radoszewski, Michael Oddo, declined to comment “while litigation is pending.”

Radoszewski, who had been CEO of the Plastics Pipe Institute in Irving, Texas, for 13 years before taking the new job in 2019, argued that his employment contract did not require him to move to Washington — and Jackson agreed. But the judge said the Plastics Industry Association was still broadly within its legal rights when it dismissed him.

"The board could fairly determine in its discretion that his ultimate failure to move or to pay back the relocation bonus package was intentional conduct that amounted to material financial loss or damage to the association's public image," Jackson said.

In its March 2022 termination letter to Radoszewski, the association said his failure to relocate meant the group "suffered significant loss of morale and staff retention, as well as a loss of confidence by staff and board members in its executive's good faith and willingness to fulfill his duties."

Jackson noted statements from the association in its filings that Radoszewski was told by board members and recruiters, orally and in writing during the hiring process, that relocation was required and said he agreed and continued to tell the association he planned to relocate.

But Jackson also noted, to Radoszewski's point, that the employment contract itself did not specifically require relocation and she ruled in his favor on that, dismissing some association claims that Radoszewski breached their contract.

"The obligation to move was not memorialized in the agreement and the court cannot simply read into it a vague and broad reference to the typical duties of a CEO and the board's authority to modify that," Jackson said.

Radoszewski said in court filings that the coronavirus pandemic kept him from moving permanently to the D.C. area, and he said he had moved there temporarily.

Jackson pointed to information in the association's filings that Radoszewski asked for and received a relocation payment of $135,000 in late 2019, before moving, saying he wanted it early for tax purposes.

The employment agreement also allowed Radoszewski to receive $8,100 a month for three months in temporary housing costs and expenses for trips to Washington to find housing.

Jackson also ruled that the association could move forward litigating the facts of one of its claims against Radoszewski, alleging unjust enrichment, because he received the relocation bonus but did not move to the D.C. area.

"Plastics has plausibly put forth a claim of unjust enrichment: It conferred the benefit of the entire $163,628 relocation benefit package, money earmarked to reimburse the new CEO for his move and to ease the transition after he arrived, and it gave all that money to Radoszewski," Jackson said.

"Radoszewski asked for it all upfront and he retained the money, and the allegations give rise to a plausible inference that its retention is unjust because he never relocated and he didn't incur most of the expenses it was supposed to cover," the judge said.

Jackson suggested a jury could have reason to question arguments she expected both sides to make if a trial moves forward.

"What will the jury think about Plastics' failure to put this supposedly fundamental provision in the contract and then its failure to react to something so fundamental for two and a half years," Jackson said. "How is Radoszewski's defense — 'at some point, it was unreasonable for my own company to believe what I was saying' — how is that going to play with a fact-finder?"

From the bench, Jackson said she would not be issuing a written order and urged "serious thought" about mediation when they follow up with the court.

Radoszewski's two-and-a-half-year tenure at the association coincided with managing through the coronavirus pandemic, which forced the group to cancel the 2021 edition of its NPE trade show, the largest plastics fair in North America.

The event, which happens every three years, accounts for up to half of the association's revenues, and negotiating its cancellation proved complicated on many levels. The group did receive federal government coronavirus relief program funding to help pay salaries.

As well, in the months leading up to Radoszewski's firing, the association saw significant staff departures, including a member of its senior leadership team and heads of councils representing various segments of the industry.

In a February 2022 interview with Plastics News, Radoszewski blamed the "great resignation" trend in the workplace two years into the coronavirus pandemic in part for the departures, saying it was frustrating and that the association faced the same staff challenges that its member companies did.

But one member of the group's senior leadership team who left in February 2022, Perc Pineda, its chief economist, did return to the association in July 2022, when new CEO Matt Seaholm was in place.

As well, early in Radoszewski's tenure in January 2020, he dismissed several members of the senior executive team inherited from previous CEO Bill Carteaux, including Chief Operating Officer Patricia Long, who had been interim CEO after Carteaux died of leukemia in late 2018.

In that restructuring, Radoszewski also dismissed several vice presidents, including those in charge of media and public communications, industry affairs and technical affairs.