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Tuesday Morning Corp., Former CEO Settle Lawsuit Over Firing

Retailer, Ex-Chief Mason End Dispute Over Her Claim She Was Dismissed After Falling Ill

 

Tuesday Morning Corp. and its former chief executive settled a discrimination lawsuit that alleged she was fired after developing breast cancer.

Kathleen Mason, the head of the home-furnishings closeout retailer, was ousted in June 20212 after a 12-year run during which the company’s stock fell nearly 60%.

While employee lawsuits over alleged discrimination are common, it is rare for one to come from a former CEO.  Ms. Mason’s lawsuit, filed last May in county court in Dallas, claimed the board wrongfully dismissed her because “it regarded her as being disabled” after she informed fellow directors about her diagnosis.

Ms. Mason dropped her suit because the dispute “has been settled amicably,” she said in a court filing on Thursday.  Following mediation, both sides reached their settlement on March 31, mediator Michael P. Metcalf said in a separate filing.

Terms of the settlement weren’t disclosed.

“We are please to have amicably resolved this matter with Ms. Mason and wish her well in her future endeavors,” a company spokesman said in an email.

Ms. Mason, 64 years old, said she was pleased the matter was “amicably resolved” and would consider another CEO position.  She said a recent checkup found her to be cancer-free.

Last May, a Tuesday Morning spokesman said the retailer would vigorously contest the suit because the company believed that the allegations were “without merit, and that her termination was lawful.”

At the time, Rogge Dunn, a partner at law firm Rogge Dunn Group representing Ms. Mason, said she had repeatedly rejected Tuesday Morning’s settlement offer of $1.5 million.  The company declined to comment on any offer at that time.

Ms. Mason initially filed a claim with the Equal Employment Opportunity Commission, alleging she was dismissed based on a perceived disability related to her cancer.  In March 2013, the federal agency issued a right-to-sue letter at her request.  Individuals granted such letters may go directly to court.

On the day Ms. Mason was fired, Tuesday Morning said its full-year sales and profit would be worse than expected.  Her suit challenged the company’s arguments that her performance was unsatisfactory and said she got a $50,000 raise and equity grants shortly before her dismissal.

Her successor, Brady Churches, resigned just six months after being appointed CEO.  At the time, Mr. Churches said the change was in the company’s best interest.  Michael Rouleau, an outside director named interim CEO, got the permanent post last August.

Reporter – Joann S. Lublin – The Wall Street Journal – April 21, 2014

Tuesday Morning Corp, Former CEO Settle Lawsuit Over Firing – WSJ 2014-04-21

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