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Originally published Friday, August 3, 2012 at 9:38 AM

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Ousted CEO sues Tuesday Morning for discrimination

The ousted CEO of retailer Tuesday Morning Corp. has filed discrimination charges against the company, saying she was sent packing after the board learned she had breast cancer.

The Associated Press

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NEW YORK —

The ousted CEO of retailer Tuesday Morning Corp. has filed discrimination charges against the company, saying she was sent packing after the board learned she had breast cancer.

Kathleen Mason also is seeking unspecified damages and her old job back. The discrimination charges were filed with the Equal Employment Opportunity Commission in Dallas.

Tuesday Morning said in a statement that Mason's termination was lawful. It also said the accusation was without merit and intends to defend itself against the claims.

Mason's attorney, Rogge Dunn, said board members' attitude toward Mason changed after she disclosed she had cancer. He says one board member even made a sarcastic comment about her wig.

The Dallas-based discount retailer announced in June that it was firing Mason, who had been CEO since 2009. It lowered its financial outlook at the same time.

In announcing Mason's firing, the company said it was time to transition leadership to a "new executive who will guide the company through its next stage." It promoted Michael Marchetti, its executive vice president and chief operating officer, as interim CEO. Mason said at the time that she was surprised by the move.

Tuesday Morning, which sells closeout housewares and home decor, reported in April that its third-quarter loss widened as fewer people visited its stores and bought less each visit. The company had planned to revamp its website and improve its marketing to help improve slowing sales.

Dunn says that Mason informed the board of her cancer so they wouldn't be alarmed if she began losing her hair or growing gaunt as a result of treatment. But he said the board's attitude toward Mason soon began to change and she was fired less than three months later.

Board members started contacting Mason's subordinates directly, which they hadn't done before, Dunn said. In March, he said one board member made a sarcastic comment about how nice Mason's hair looked; she was wearing a wig at the time.

"One of the reasons Kathleen is doing this is not just for herself, but for others in the workplace," Dunn said. "A lot of times there's overreaction and misunderstanding by employers about cancer."

Tuesday Morning has about 850 stores across the country.

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