In a story worthy of a prime time serial drama, Highmark Inc. on Sunday fired its CEO Kenneth Melani, MD, for "cause" just four days after Melani was arrested for assaulting the estranged husband of a Highmark employee with whom Melani has allegedly been having an affair.
Melani, who has served as Highmark CEO since 2003 and has worked for the company for the past 23 years, was placed on unpaid administrative leave on March 29, the day after he was arrested on assault charges stemming from a confrontation with Mark Myler, the husband of Highmark employee Melissa Myler, at their Oakmont, Pa., home.
The company announced at the time that its Board Chairman J. Robert Baum would serve as acting CEO in Melani's absence.
"We regret that this situation arose. The board is fully committed to Highmark's mission and the business strategies that will guide us going forward," said Baum in a March 29 statement announcing his appointment as acting CEO.
According to a company spokesperson, this commitment includes continuing to pursue its affiliation with local hospital health system West Penn Allegheny, to which Highmark has committed as much as $475 million to shore up the struggling health system.
But what was intended to be a short-term bridge to allow Melani to handle a "personal matter" became a greater crisis as details of his affair with Myler began to come out.
According to published reports, Myler was hired by Highmark in October into a job that did not report directly to Melani and that the affair began shortly thereafter. Highmark officials said that Melani was approached in early March and informed that according to company policy, he had the option of either leaving the company or of Myler leaving the company. Melani reportedly denied there was any relationship with Myler.
Faced with a growing corporate scandal, the Highmark Board met April 1 and later that day announced it was dismissing Melani permanently.
"The board has reviewed this situation thoroughly and has taken decisive action to address the matter," Baum said in an April 1 statement. "For 75 years, Highmark has served this community with integrity and is committed to maintaining the highest standards …Our mission of providing quality, affordable healthcare has never been more important, and I'm looking forward to working with our employees and senior management team in addressing the many challenges and opportunities that lie ahead."
As a result of his firing, Melani has hired Pittsburgh-based employment attorney Samuel Cordes to examine the circumstances of his firing. Cordes told the Pittsburgh Business Times that the firing was retaliatory, though he didn't spell out what the retaliation was for.
Highmark officials noted that the firing was for "cause" and defined that as "among other things, willful or gross misconduct which materially injures the company.
"The willful and gross misconduct includes not only the behavior that is alleged to have occurred on March 25, but also the admitted sexual relationship with a junior employee of the company and the conflict and risk to the company associated with that relationship, as well as repeated denials to senior management regarding that relationship," the company noted in a prepared statement release Wednesday.