Western Railroad Discussion > BC Rail executive launches lawsuit

In a four column article on Sunday Dec 15 the Vancouver Province reports that former BC Rail executive Mark Mudie has launched a lawsuit over wrongful dismissal. The documents allege that BC Rail executives conspired to weaken the corporation's financial situation in a bid to force the provincial government to sell it off and thereby trigger generous severance packages for top officials. The article points to an interesting internal fight among top BC Rail brass. I'm sure there will be lots more on this one. Included is a large photo of the last RDC run arriving at Prince George Oct 30.

For the full text go to:

http://www.canada.com/vancouver/story.asp?id=%{CD4AEF20-AB14-4CFE-8208-1636181992C3}

(darn thing can't be made clickable)

Ken in Vancouver
cp1400

http://tinyurl.com/3kz5

(There are ways to get around problems with invalid characters in the link)

Isn't that the same kind of mentality that killed the Milwaukee Road?


TCS - Me First and the Gimme-Gimme's.

B.C. Rail 'sabotage' plot alleged

President fired for 'clandestine' affair claims execs planned for big buyouts

Andy Ivens

Sunday, December 15, 2002

VANCOUVER -- A top B.C. Rail executive fired for having a "clandestine" love affair with a colleague claims he's the victim of a plot among senior officials to enrich themselves by "sabotaging" the Crown corporation's profitability.

The allegation is detailed in court documents filed in a wrongful dismissal suit brought by Mark Mudie, former president and chief operating officer, against the corporation.

The documents allege that B.C. Rail executives conspired to weaken the corporation's financial situation in a bid to force the provincial government to sell it off -- triggering generous severance packages for top officials.

Documents obtained by the Vancouver Province include a letter signed by Bob Phillips, B.C. Rail Group president and chief executive officer, stating that Mudie was fired because of his romantic involvement with Debbie MacLagan, the corporation's vice-president of marketing and sales.

MacLagan, who was appointed vice-president by Mudie, had been with B.C. Rail for 11 years. She was dismissed Aug. 23 this year -- the same day Mudie was fired.

But in a writ filed in B.C. Supreme Court, Mudie says his dismissal was "without just cause and without notice."

He admits to a "personal relationship" with MacLagan but says their affair was a red herring used to get rid of him for other motives and that his dismissal has ruined his career.

Mudie claims he was sacked because he was steering the railway to an improved financial picture, contrary to Phillips's alleged hidden agenda.

In an Aug. 26 letter to the railway's lawyers, Mudie's lawyer, Murray Tevlin, notes: "B.C. Rail has just gone through the best seven months' performance in its history. Perversely, but truly, this is the reason for Mr. Mudie's dismissal."

The letter is included in the B.C. Supreme Court file, along with an affidavit sworn by Mudie.

Tevlin alleges Mudie's dismissal "has apparently been driven by certain senior executives at B.C. Rail with a view to triggering attractive compensation packages which they have negotiated for themselves contingent upon the sale of B.C. Rail.

"In order to ensure the triggering of those rich packages, there has been what Mr. Mudie has referred to as a 'failure strategy.'

"A plan, referred to as the 2004 Plan, was created which was not thought to be realistic in business terms and not well thought-out.

"Mr. Phillips has expressed to a number of officials that the 2004 Plan will not succeed.

"The plan has purposely set out unrealistic objectives so that, when it fails, it will convince the government of British Columbia that there is no option but to sell the railway.

"Mr. Mudie, contrary to expectations of some ... has delivered a superior financial performance," says Tevlin's letter. "In other words, he is delivering performance considerably above the 2004 Plan, which will now give the government the option of not selling the railway and, therefore, not triggering the rich severance package for certain executives."

Tevlin says Phillips "sought to sabotage the Plan by refusing to order new rail cars, which would have increased the profits of the company by at least $700,000. "In addition, (Phillips) has been unsupportive of a renewal of the transportation contract with the railway's largest customer, Canfor. Mr. Mudie opposed Mr. Phillips on this issue and he has now paid the price."

To back up his claim that Mudie was turning B.C. Rail around, Tevlin says the railway had revenues of only $30 million last year, but, as of late August, the 2002 figure was heading toward $70 million. "The target under the 2004 Plan was about $52 million."

Mudie was earning a base salary of $270,000, with perks, such as a membership in the Terminal City Club, and bonuses on top of that.

"For many years I have been accustomed to a lifestyle based on an income of over $400,000 per year.

"I am (now) in a position where I have to draw on my line of credit in order to meet my day-to-day living expenses," claims Mudie, who states he has now moved into a "cheaper" apartment near the University of British Columbia.

In a three-page termination notice to Mudie dated Aug. 23, Phillips says Mudie was fired for just cause because he breached the company's ethical guidelines by having a "clandestine affair" with MacLagan.

Phillips wrote: "You did not see fit to bring this relationship to the attention of the company's ethics adviser.

"More importantly, your conduct, both in maintaining the secrecy of the relationship as well as the manner in which you have conducted the business of B.C. Rail in relation to Ms. MacLagan, has put you in a real and apparent conflict between your promotion of the private interests of Ms. MacLagan and the best interests of the company.

"In the conduct of the relationship with Ms. MacLagan, your conduct of the business of the company has become so biased that it has created an adverse impact on the operations and morale of the senior management team at B.C. Rail, your direct reports, and has discredited you as the leader of that team."

Mudie swears his relationship with MacLagan was in the open.

In his letter, Phillips criticizes decisions taken by Mudie "that directly benefited the economic interests and advanced the career interests of Ms. MacLagan ... You have destroyed the trust and confidence the company must place in you as the senior executive."

Phillips refers to MacLagan's promotion to assistant vice-president in 2001 and to vice-president, marketing and sales in February 2002 as events that upset the rest of the management team.

But Mudie's lawyer, Tevlin, counters that MacLagan was properly qualified. He accuses Phillips of harbouring outdated attitudes about women in the boardroom.

"It was (B.C. Rail vice-president of human resources) Kevin Mahoney who recommended Ms. MacLagan for the position of assistant vice-president," Tevlin's Aug. 26 letter states.

"Ms. MacLagan's performance in the position as far as achieving excellent corporate results has been outstanding."

Tevlin's letter also says the decision to raise MacLagan's salary from $120,000 a year to more than $150,000 was recommended by a private consulting firm, Towers Perrin, and approved by B.C. Rail's board of directors human resources committee chaired by Anne Stewart.

Even at $150,000 a year, Tevlin argues MacLagan was underpaid by about $30,000, given the complicated department she headed.

© Copyright 2002 Times Colonist (Victoria)

Actually I think there is some merit in Mr.Mudie's claims, the way things are being run around here a lot of us employees some times think that the BCR is being run into the ground deliberately. Sorry to see Mr.Mudie go as he has an extensive railway background and understands how and why railways operate and by golly I think he was honestly turning things around profit wise etc. Heck of a lot better than the bean counters we got now.
Doug

Never, ever date where you work - ever if you like your job.


TCS - hate politics