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Tuesday Morning Ex-CEO Says She Was Fired for Having Cancer

Aug. 3 (Bloomberg) -- Tuesday Morning Corp.’s former Chief Executive Officer Kathleen Mason filed a discrimination claim accusing the home furnishings close-out chain of firing her because she has breast cancer.

Mason was removed from her job on June 6, about three weeks after she claims she got an ultimatum following the disclosure of her medical condition to the company’s board.

“After I informed members of the Board of Directors that I had breast cancer, I was told I would be fired if I did not resign or retire,” Mason said in an Aug. 1 complaint with the U.S. Equal Employment Opportunity Commission. “I was fired based on a perceived disability.”

Tuesday Morning, based in Dallas, said in June that Mason, 63, was removed as CEO because the board “concluded it was the right time to transition leadership to a new executive who will guide the company through its next stage,” according to a statement on the company’s website. Laurey Peat, an outside spokeswoman for the company, today declined to comment on Mason’s allegations.

Mason claims three “dissident” directors on the then five-member board wanted her fired because they feared she would be too ill or too distracted by cancer treatments to focus on improving sales at the 850-store chain.

Office Gossip

Tuesday Morning lost $4.2 million in the fiscal third quarter, ended March 31, compared with a $3.6 million loss in the comparable quarter of 2011. Net sales fell $8.3 million to $812.8 million for the fiscal year ended June 30, compared with $821.1 million in sales during the previous fiscal year. For the three months ended in June, net sales were essentially flat with the comparable period of last year, according to a press release.

Mason was diagnosed with breast cancer in the summer of 2011 and quietly underwent three surgeries during October and November. She decided to tell two of the company’s directors about her condition in January and February to stem office gossip over why she’d lost considerable weight and much of her auburn hair, a side effect of the cancer treatments.

“I took vacation time for my surgeries,” Mason said today in an interview. “For my post-operative visits I would go to the doctor early in the morning and then to the office for the rest of the day, often staying until 7 or 8 at night. This allowed me to dive more into my work, and my work became a distraction” from her medical concerns.

Prognosis ‘Good’

“Kathleen was able to do the job 100 percent,” Rogge Dunn, Mason’s lawyer, said in an interview. “They just assumed she couldn’t do it because she had cancer. Her prognosis was good, which is what she wanted to tell the board.”

U.S. disability laws forbid companies from discriminating against any employee for a perceived disability, Dunn said. He also said Tuesday Morning didn’t warn Mason that her job performance was slipping or follow company protocols for dismissing workers for just cause.

Mason said she was awarded a $500,000 bonus and her employment contract was extended for another year in February.

“If there were problems with my performance, why give me a bonus?” Mason said.

She also points to Tuesday Morning’s relative financial success against its peers in the home-furnishings sector, which has suffered along with the downturn in the national housing market.

Medical Benefits

“The most important thing to shareholders may be the share price, but you can’t have a share price without a solvent company,” she said. Mason said at least a half-dozen competing chains such as Linen ‘N Things, Bombay & Co. Inc., and Filene’s Basement declared bankruptcy during her 12 years as president and CEO of Tuesday Morning.

Mason said the company’s severance package focused on retaining her medical benefits and offered roughly 10 percent of her $1.3 million yearly compensation package if she’d agree to remain a company consultant for 10 years, followed by an 18-month non-compete period.

“They didn’t think I could run the company, but they didn’t want to let me work for a competitor either,” she said. “They wanted to tie me up for the rest of my career.”

Dunn said Mason will seek a right-to-sue letter from the EEOC, which may conduct its own investigation into her discrimination accusations, to press Mason’s claims as quickly as possible.

“There are a lot of people with cancer in the workplace, and people have all sorts of misperceptions and biases about it,” Dunn said. “The board thought she might not be able to suck it up, and thought, ‘we don’t want to handle this.’ But is it something you have to handle under the law, something you have to do morally and ethically? Yes.”

To contact the reporter responsible for this story: Laurel Brubaker Calkins in Houston at

To contact the editor responsible for this story: Michael Hytha at

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