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Sto:lo grand chief sues First Nations Health Authority for $388,125

Authority claims chief created toxic work environment, held grudge

Sto:lo Tribal Council Grand Chief Doug Kelly is suing the B.C. First Nations Health Authority he once chaired for $388,125, alleging a breach of contract.

The situation arose from an alleged conflict of interest issue where the authority CEO had recommended hiring an ex-spouse but has grown to involve allegations of bullying and abuse by Kelly himself.

The 15-member First Nations Health Council he had chaired oversees the authority.

The suit revolves around a conflict of interest policy which states qualified relatives may be employed by the council, “as long as it does not place employees in a conflict of interest situation.” The definition of relative is a spouse or partner, past or present.

A notice of civil action filed in B.C. Supreme Court Dec. 6, 2019 said then-CEO Joe Gallagher recommended creating a position of vice-president of policy, planning and quality, and that his former spouse Harmony Johnson fill the position temporarily. No competition was held and the board approved the appointment on an acting basis.

The suit said Kelly repeatedly raised concerns about Johnson being in the position. He and Louis were asked to report on the situation.

In June 2019, the board directed Gallagher to terminate Johnson.

“Gallagher refused to comply with the board’s direction,” Kelly’s suit said.

Soon after, the directive was rescinded, the suit said.

Two weeks later, Kelly and deputy chair Allan Louis were removed as chair and deputy chair respectively.

Gallagher was dismissed in October, the suit said.

Kelly was in his fourth term as chair since 2010, a position paying a maximum of $183,000 annually. It has been his only source of income since 2010.

He alleges a breach of contract, claiming he is owed $15,525 a month for the remainder of the 25 months of the contract. He also seeks general, aggravated and punitive damages.

The authority’s amended response filed June 3 said there is no written contract between Kelly and either the authority or council.

And, it said, after Johnson had crossed him several times, “Kelly took a personal dislike to her and pursued the alleged conflict of interest...allegation as part of a personal grudge against her.”

Johnson resigned the position in January.

It said Kelly’s “strong personality and leadership style” led to bullying or mistreatment of board members as well as undue interference in authority matters.

“Members have observed or experienced control, bullying and lateral violence by Kelly, including name-calling, insults, being told to ‘shut up,’ women being singled out for bullying and refusal to address conflict resolution.”

Those issues, the response said, led to his removal as chair.

The response said Kelly did not object to the vote, suggested it proceed by show of hands, voted against and did not complain he had not been fully heard in the process.

The authority filing said Kelly served as an elected member and remains on the board. It said he is not entitled to damages – and not from the authority that had no role in the council’s decision.

It said while the authority makes the payments, it does so at council direction.

The response said Kelly has made significant contributions to the authority’s creation and transition of health care to first nations’ control.

However, it said, Kelly’s actions have led to the creation of a toxic environment.

The authority is seeking for the suit to be dismissed.

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