A former executive at Tilray Brands, Inc. (NASDAQ: TLRY) is challenging the company’s attempt to overturn her $4 million arbitration victory, accusing Tilray of employing secretive tactics in a legal fight that spans multiple states.
Kathryn Dickson, the former president of Tilray’s subsidiary Manitoba Harvest, is urging U.S. District Judge Jamal Whitehead in Seattle to uphold the arbitration award she won last year. Dickson’s legal team accused Tilray of rushing to a Washington court to have the award voided before it was even finalized in Minnesota, where the arbitration took place.
During oral arguments on Monday, Dickson’s attorney criticized Tilray for what he described as “cloak-and-dagger” legal maneuvering, according to Law360. Fogg argued that Tilray’s actions — filing its petition in Washington without notifying Dickson and before the Minneapolis arbitrator had issued a supplemental award on attorney fees — were both premature and secretive.
The dispute centers on Tilray’s alleged failure to grant Dickson certain stock benefits following her sudden termination, the day after Tilray announced its merger with Aphria. The arbitrator, a retired judge, awarded Dickson $3.8 million last March for her employment claims.
Tilray countered that it had not engaged in any bad-faith legal tactics. The company said that Tilray acted within a 90-day window allowed under arbitration law to challenge the initial award and chose the Washington federal court as a legitimate forum for its petition.
The company argues that the arbitrator erred in finding that Dickson did not breach confidentiality provisions of her employment agreement when she downloaded thousands of company records to use in the arbitration proceedings. Tilray also disputes the amount of damages awarded to Dickson, including double damages with pre-judgment interest on her severance pay and bonus claims, and about $125,000 in attorney fees and costs.
With the Minnesota federal case stayed pending the outcome of the company’s move in Washington, the decision from Judge Whitehead, expected within two weeks, will be the next step in the dispute. Tilray, now headquartered in New York City and Canada, maintains that it followed proper legal procedures in its attempt to vacate the arbitration award.