TUPELO – An arbitrator has settled financial differences between former Tupelo-based JBHM Education Group LLC and its ex-chief executive officer.
JBHM Education, now of Jackson, will pay Gary C. Bailey $133,120 for his interest in the company, which fired him Jan. 12, 2007.
In turn, Bailey paid the education consulting firm $32,092.50 as damages for breaching his duties, such as loyalty and good faith, to the company.
But those damages were limited to specific actions taken by the company in response to a legal threat based on sexual harassment allegations by Cindy Cason, who later married Bailey.
JBHM Education was founded from the Tupelo architectural firm of Johnson Bailey Henderson McNeel, in which Gary Bailey was a partner.
JBHM-E and Bailey also were assessed their parts of paying the American Arbitration Association, as well as fees and expenses of arbitrator Stephen G. Bullock, according to documents filed Monday in the U.S. District Court of the Northern District of Mississippi.
JBHM-E first sued Bailey and Cason in Circuit Court of Lee County. But in April 2008, Cindy (Cason) Bailey moved the lawsuit to federal court, saying the couple resided in Alabama.
At the same time, Bailey asked the court to order arbitration and halt the lawsuit.
JBHM-E accused the Baileys of conspiring to defraud the company by devising a scheme to threaten a sexual harassment lawsuit while Bailey was its CEO and Cason an employee.
Although the two were having a romantic affair, the threat alleged Cason felt employment pressure if she didn’t relent to Bailey’s sexual desires.
JBHM-E asked for monetary damages and claimed Bailey was helping Cason get an Alabama franchise at a discount or set up a competitor while he ran the company.
Bailey countersued seeking $764,000, saying JBHM-E breached its agreement when it fired him.
Also Monday, the Baileys asked the court to wrap up the original lawsuit in their favor, saying all the issues were resolved by arbitration.
Although Cindy Bailey was not a party to the arbitration, she and her husband claim JBHM-E cannot pursue its claims against her because it could have done so in the arbitration.
The original lawsuit seeks at least $400,000 from Cason, plus interests, attorneys fees and court costs.
Contact Patsy R. Brumfield at (662) 678-1596 or firstname.lastname@example.org.
Pasty R. Brumfield/NEMS Daily Journal