The Higgs government is trying to quash a decision that awarded seven months' pay to the former CEO of Opportunities New Brunswick for the way he left the job in 2020.
Provincial lawyers were in the Court of Queen's Bench this week arguing they should not owe Stephen Lund any money.
Lund's five-year contract with the Crown corporation ended in the spring of 2020 and he wasn't renewed.
But Lund argued that the government led him to believe he would be extended, and also loaded him up with additional work in 2019. That left him no reason and no time to look for a new job.
"I find that Opportunities New Brunswick breached the employment contract with Stephen Lund by failing to provide a proper 12-months working notice," adjudicator Raymond Gorman wrote in the July 2021 decision.
Gorman awarded Lund seven month of salary and benefits, covering from when he left ONB in February 2020 to when he found a new job in Toronto in September 2020.
The province now wants that decision overturned, arguing it honoured Lund's five-year contract and had no obligations to him beyond that.
Lund "knew that a second term was not guaranteed but was a possibility only" and "was paid to the end of his contract," says the province's filing. "The contract was not renewed."
Lund's lawyer Dan Leger said the former CEO would not be doing interviews about the case. There was no comment from the Higgs government.
The ruling provides a new glimpse of Lund's relationship with the Higgs government, including a premier that once wanted him fired.
Higgs once wanted Lund fired
Lund was hired by the Liberal government of Premier Brian Gallant to run ONB, a new Crown corporation and the latest in a series of provincial government job-creation entities. His salary was $262,260.93 in 2019.
As Opposition leader in 2017, Blaine Higgs called on Gallant to fire Lund after the auditor-general said ONB was not moving fast enough to implement her recommendations stemming from the $63.4 million Atcon loan fiasco.
"Stephen Lund should lose his job over this," Higgs said at the time. "He should be fired."
But after becoming premier in November 2018, Higgs kept him in place to oversee a rethink of Opportunities New Brunswick's approach to job creation.
The premier announced in his 2020 state of the province speech that the CEO would be moving on after the end of his five-year term and thanked him "for his steady commitment to New Brunswick's growth, and for his role in helping to shape the future of ONB."
According to Lund's evidence in the adjudication, that came as a last-minute surprise to him.
Under the CEO's contract, he and the province were to discuss the possible renewal of his contract for a second five-year term in the 46th to 48th months of his mandate, meaning December 2018 to February 2019.
The adjudicator wrote in his ruling that neither the province nor Lund raised the issue during those months, but that Lund began asking ONB board chair Roxanne Fairweather about his possible reappointment in July 2019.
Fairweather told him Higgs didn't want to discuss it until ONB finished its 2019 strategic plan, which meant not until December 2019, just two months before his contract expired.
Around the same time, Lund was asked to take on new tasks including leading an economic development committee for the Belledune area, sitting on the Cannabis New Brunswick board and helping lead an "Energized Private Sector Initiative."That added to Lund's already heavy workload and "denied him of any real opportunity to seek alternate employment," the adjudicator wrote.
According to Lund's testimony, he talked to Higgs's chief of staff Louis Leger about a reappointment, and Leger said Lund was "in a better position now than you were before."
And Higgs adviser Bob Youden told him in December 2019 that "it will be up to you and your team" to implement the new ONB plan, implying he would be renewed, Lund said.
In early January, Fairweather told him he wouldn't be renewed for a new five-year term but his contract would be extended for one extra year, which Lund said he accepted.
But on Jan. 23, a week before Higgs's state of the province speech, Fairweather told him he wouldn't get the extra year after all and would be finished on March 31, 2020.
Lund told the adjudicator he asked the ONB board for one year's pay, and the board voted unanimously to urge Higgs to a "one-year reasonable notice period."
But Economic Development Minister Mary Wilson had responded that he was not entitled to severance.
The government's failure to have good-faith negotiations with Lund about his contract, along with the hints he might be renewed and the extra workload he was given, "amount to bad faith" by the province, Gorman concluded.
But the province says the ruling is "far outside" the limits of court precedent. Other rulings in similar cases said there's no entitlement to a notice period if a job contract has a fixed expiry date.
Lund's "true dissatisfaction was not being reappointed to the position," the province argued.
Justice Terrence Morrison heard arguments in the case this week and did not immediately rule on the province's request.