UPDATE 1-Tuesday Morning ex-CEO says fired after breast cancer disclosure

Fri Aug 3, 2012 6:13pm EDT

Aug 3 (Reuters) - Tuesday Morning Corp's former chief executive filed a discrimination complaint against the home decor retailer, saying she was removed after disclosing she was suffering from breast cancer.

Kathleen Mason, who was fired as president and CEO in June, filed disability discrimination charges with the Equal Employment Opportunity Commission.

Rogge Dunn of Clouse Dunn LLP, who is representing Mason, said the board's attitude toward Mason changed after learning of her breast cancer diagnosis and treatment.

"The board made it clear she was not being fired 'for cause' and the company wanted to retain her expertise for another 11-and-a-half years. One has to question why she was removed from her job," the Dallas-based lawyer said in a statement.

Tuesday Morning late on Friday said Mason's termination was lawful and was made in conformity with the terms of her employment agreement.

"The company believes that any claims relating to her termination are without merit and intends to vigorously defend any such claims," the closeout retailer said in a statement.

Tuesday Morning fired Mason after activist investment firm Becker Drapkin Management LP, one of the top shareholders, criticized her performance and demanded seats on the board.

"Mason has led an extraordinary destruction of shareholder value in stark contrast to the success of Tuesday Morning's peer group," the firm said in a letter to the board dated June 5.

Two Becker Drapkin nominees were later given seats on the board.

Tuesday Morning shares have lost nearly 90 percent of their value over the last seven years.

Mason, 63, had been the president and CEO since July 2000.

Shares of the Dallas-based company closed at $5.04 on the Nasdaq.