by Mike Caswell

Baja Mining Corp. says that Kendra Low, its former $250,000-per-year corporate secretary, is not entitled to any damages for wrongful dismissal, because she quit. The company claims that she resigned after the board temporarily removed her corporate secretary title. She then demanded $600,000 in severance.

The company is responding to a lawsuit that Ms. Low filed in the Supreme Court of British Columbia on May 28, 2012. According to the suit, Baja fired Ms. Low at a board meeting on May 7, without any good reason, after she had served the company "diligently and with sufficient aptitude" for over eight years. She said that her employment contract entitled her to 18 months of severance if the company fired her without cause.

Baja, however, has much different version of her departure. In its response to that suit, the company says that the board only removed her title of corporate secretary on May 7, which it did because she was not independent of then-president John Greenslade. The company made it clear that she was still an employee and retained her other title, as vice-president of administration.

The company reinstated her as corporate secretary the following day, after Mr. Greenslade resigned. Baja advised her that she would be welcomed back, but she refused to return and took the position that the company had fired her. Through her lawyer, she demanded $600,000 in severance.

Ms. Low's parting with the company came after a contentious proxy battle between Mr. Greenslade and Mount Kellett Capital Management LP, the company's largest shareholder. Mount Kellett claimed that Mr. Greenslade had operated the company as a "personal fiefdom with no regard for proper disclosure or good governance," among other things.

Although Mount Kellett narrowly lost a bid to replace the board, it effectively won a few weeks later. On April 26, the company announced that its flagship Boleo project was facing a $246-million budget shortfall. The news sent the stock to new lows, and most of the directors resigned. The dissidents then helped reconstitute the board.

Low's claim

Ms. Low filed her notice of claim against the company on May 28, 2012, after what she said were unsuccessful efforts to address her dismissal. Her termination came after a "malicious public campaign" by Mount Kellett to destroy her reputation, according to the suit. During the proxy battle, Mount Kellett had said her pay was "utterly inconsistent with her experience" and that she had won "the Baja lottery." Ms. Low, however, said she was fully qualified for the position and was not overpaid.

The actual firing, as described by Ms. Low, came on May 7, after the dissidents had helped form the company's board. At a board meeting that day, the first order of business was to remove her as corporate secretary. She said the firing was an "arbitrary and willful breach" of her employment contract, and amounted to wrongful dismissal.

She sought a $375,000 judgment, representing 18 months of salary, plus vacation and bonus pay. She also sought damages for defamation, saying the firing left the impression that Mount Kellett's earlier statements about her were true. Vancouver lawyers Randal Kaardal and Greg Allen of Hunter Litigation Chambers filed the suit on Ms. Low's behalf.

Baja's response

Baja, in a response filed at the Vancouver courthouse on Wednesday, June 20, denies that it owes Ms. Low anything. According to the company there was no firing, and even if there were, she could have taken her job back. Ms. Low's temporary removal as corporate secretary did not trigger the severance payments specified in her contract.

The response describes Ms. Low as an employee of eight years who rapidly advanced in both title and salary. She began as an assistant in 2004, earning $60,000 per year, and advanced to become an officer of the company in 2008. Her salary reached $250,000 in September, 2011, and she received a $102,000 bonus in 2010 and a $120,000 bonus in 2011.

The board meeting at which the company removed Ms. Low as corporate secretary, as described in the response, came at a difficult time. The company had just reconstituted its board to respond to the financial crisis it was facing as a result of the Boleo cost overruns. Mr. Greenslade had not yet resigned, and the company was planning to "address the position" of chief executive officer.

Given that Ms. Low was not independent of Mr. Greenslade, the board proposed removing her as corporate secretary. Five directors approved her removal, and two abstained. Ms. Low was told that the company was only removing her as corporate secretary and that it did not intend to fire her.

According to the response, Ms. Low took the next day off work, telling the payroll clerk in an e-mail that she was "taking a personal day today." The company received a letter from her lawyer later that day, stating that Ms. Low took the position she had been fired, and demanding payment of $600,000. The letter arrived during a board meeting, at which the company resolved to reinstate her as corporate secretary. Mr. Greenslade had resigned earlier that day, and there was no longer any concern over Ms. Low's independence.

Baja claims it offered Ms. Low the opportunity to return to work more than once in the same position she had previously held, but she declined. Her lawyer wrote the company on May 15, saying she would not be returning, and she turned in all company property the same day.

The company says its actions do not amount to wrongful dismissal, and asks that the courts dismiss the case. Alternatively, if a judge rules that she was fired, then Baja contends she failed to mitigate her damages by not returning to work.

Vancouver lawyer Michael Weiler of Boughton Law Corp. filed the response on the company's behalf.