A severance deal worth more than $500,000 is a "sham" and should not be paid out, according to the Calgary Police Service, which filed a statement of defence this week in connection with an employee's lawsuit.

CPS lawyer Stephanie Morson filed her lawsuit last month after the service refused to pay out her severance, which was negotiated in 2018 with then-chief Roger Chaffin.

Morson hasn't been paid — which CPS says is because she breached the conditions of the contract — and now she wants the severance plus an additional $180,000 in general and punitive damages.

The Calgary Police Service filed a strongly-worded statement of defence this week, criticizing Morson and Chaffin for making the deal in the first place.

"It was a sham orchestrated by Morson and Chaffin acting together, without authorization, to appropriate public funds for Morson's private benefit," reads the document.

Morson gave herself $50K raise

Morson, general counsel for CPS, is on long-term disability leave, which she says she was forced to take after being the victim of sexual harassment and bullying at work.

"CPS has been insensitive and demonstrated a lack of concern for Ms. Morson's well-being, despite knowing of the vulnerable mental state caused by the campaign against her and her constructive dismissal," reads the statement of claim.

But current Chief Mark Neufeld and CPS said through their joint statement of defence that "CPS had never substantiated the 'sexual harassment and loss of reputation' said to underlie Morson's alleged entitlement to general damages."

CPS alleges Morson was in a "clear conflict of interest" when she negotiated her severance, an agreement that was drafted by one of her subordinates at her direction.

The statement of defence also alleges Morson commissioned a salary review just before her disability leave, which saw her receive a $50,000 raise, bringing her to $246,000 annually.

The document suggests Morson's salary was "well above what was considered industry standard for an employee in Morson's position."

Morson breached contract, says CPS

According to the deal, CPS would top up Morson's disability payments until she was cleared for work and then she would be paid three instalments of $180,000. In exchange, Morson would release CPS from any further actions.

She agreed not to pursue any actions against CPS in the form of civil claims, human rights grievances or Workers Compensation Board (WCB) proceedings.

But just two months later, Morson advanced a WCB claim seeking compensation for alleged workplace harassment.

The same month she filed an Occupational Health and Safety complaint against CPS, and in January 2019, Morson made a complaint under the Alberta Human Rights Act against CPS and the chief "alleging they had discriminated against her on the basis of gender during her employment."

'Unconscionable and unjust'

All three actions were "contrary to the clear and unequivocal terms of the release," according to the statement of defence filed on behalf of CPS and the chief.

"It would be manifestly unjust for Morson to obtain the benefit of the severance agreement after flouting her only substantial commitment under that agreement, which was to refrain from bringing any complaints, claims or proceedings against CPS and the COP [chief of police]"

As a result, CPS has incurred "significant legal costs," and the WCB claim and HR complaint remain unresolved.

If Morson was to receive her severance, it would be "unconscionable and unjust," according to the statement of defence.

In February 2019, CPS informed Morson she had breached the agreement, which meant she was no longer entitled to her severance.

Morson victim of 'personal vendetta,' says lawsuit

Morson's troubles with CPS began after a failed relationship with Staff Sgt. Bruce Walker, who then "initiated a personal vendetta and campaign" against her, she alleges in the statement of claim.

Walker was behind complaints against Morson filed with the Law Society of Alberta and CPS's respectful workplace office, according to the court document. The complaints were ultimately investigated and dismissed.

In her lawsuit, Morson says those allegations created an "intolerable working environment for her with the result that she was forced to take a medical leave of absence and go on disability benefits."

Last year, Walker sued CPS and named employees, including Morson, for $300,000, alleging he was bullied and harassed and that his career was sabotaged.

The senior officer alleged Morson tried to ruin his career.

In September 2019, Walker discontinued his action against all defendants.