When Lo's father sent her to work at the Pirate Ship for Kelly, who then makes Lo's life miserable. When Lo was forced to wash the dishes, Kelly stated that it was going to be fun having Lo working for her. When Lo refused to eat worms, Kelly threatened to call Lo's father.
When Lo and Emma were talking to each other, Kelly started to boss them around. Tired of Kelly's snobbery, this later caused Lo to pretend to be sick, although Kelly realized that Lo was only pretending to be sick when a parrot repeated Lo's sayings. When Lo went to the spa, Kelly found her there and furiously forced her back to work.
When Lo stated that she was a terrible babysitter, Kelly glared at her and intentionally chose Lo for the babysitting job. However, this turned into a positive change for Lo. She was given the job permanently, and so having switched departments, Kelly is no longer her supervisor.
Lo gets angry at Kelly when the Pirate Ship manager breaks Emma's heart by asking Ty out on a date, then when she finds out that Kelly is just after her family's money. Later, when Kelly finds out that Lo sabotaged most of her date (by arranging to have her order tainted poutine that would cause her to run for the washroom), she threw a spiked fry into Lo's mouth, causing her to bolt for the bathroom as well.
Kelly antagonizes Lo again, as well as Emma, by continuing to make her play for Ty in order to get closer to the rest of the Ridgemount family and ingratiate herself with them. Lo, with help from Emma, tries to break Kelly and Ty up and expose the true intentions of her evil former boss, but Kelly foils the girls at every turn. Lo uses a cell phone video camera to catch Kelly bragging that she intends to get into Mr. Ridgemount's will, but when she tries to play the video to her family in order to expose Kelly and get her fired, she accidentally plays the wrong video (one of Lo badmouthing her family) instead, resulting in Kelly getting to go with the Ridgemounts on a trip to Thailand instead of Lo.
Lo, along with Emma, sets up a plan to make Ty look disgusting so that Kelly will break up with him. After they succeed, Emma dates Ty, but under a different persona called "Jemma" (a friend of Lo's from France), as Lo says she shouldn't be the rebound girl. After everything is revealed, even that Jemma is Emma, Ty chooses Emma over Kelly as Lo finally succeeds in getting her brother away from her villainous, gold-digging ex-boss.