Court for Montgomery County Case No. 422073-V
Nazarian, Shaw Geter, Fader, JJ.
Belfiore served in various executive positions at Merchant
Link, LLC ("Merchant Link") over a period of six
years, and rose ultimately to the position of Chief Operating
Officer. In 2011, he sought a pay increase, and the company
was considering it. Before a final decision was made, though,
he was terminated after he tried, the company contends, to
sabotage an important company project. He challenged his
termination in the Montgomery County Office of Human Rights
("OHR"), alleging that he had been fired and,
before that, denied the pay increase, on the basis of race.
After a six-day evidentiary hearing, a hearing examiner found
that Merchant Link had established non-discriminatory reasons
to justify his pay and termination. The Circuit Court for
Montgomery County affirmed OHR's decision, and we affirm
it as well.
Link is headquartered in Silver Spring and serves as an
electronic intermediary between credit card issuers and
merchants. The company uses proprietary systems to process
and provide security for up to five billion credit card
transactions per year. Merchant Link hired Mr. Belfiore in
September 2005 as a financial analysis manager, and he served
as Merchant Link's chief operating officer
("COO") from mid-2008 until November 2011.
December 2008, after some corporate restructuring, Merchant
Link became a joint venture owned by the company's two
major clients, Chase Paymentech ("Chase") and First
Data Corporation ("First Data") and managed by a
board of managers (the "Board") that consisted of
Chase and First Data executives. The Board was responsible
for approving the appointment and replacement of Merchant
Link officers and for setting officer compensation.
before the corporate restructuring, in May 2008, Mr. Belfiore
had been appointed as Merchant Link's COO. Mr. Belfiore
replaced Dan Lane, an original employee of the company who
was appointed Chief Technology Officer ("CTO"). At
its first meeting in 2008, the Board elected Messrs. Belfiore
and Lane and Christopher Justice, who had been the
company's president before the restructuring, as
"officers" of the new joint venture. Mr. Belfiore
remained COO, Mr. Lane remained CTO, and Mr. Justice was
elected Chief Executive Officer ("CEO").
Justice resigned in March 2009 and was replaced as CEO on an
"interim" basis by Board member Daniel Charron.
During this period, Mr. Charron remained at his office in
Dallas and delegated day-to-day operational control to Mr.
Belfiore, Mr. Lane, and Timothy Kinsella, the executive vice
president for sales. Mr. Charron served as interim CEO for
approximately two years. In April 2011, Mr. Lane took over as
first meeting in December 2008, the Board created a
compensation committee, and appointed two of its members, Mr.
Charron and Barry McCarthy, to serve on it. Mr. Belfiore
asserts that Messrs. Charron, McCarthy, and Lane
discriminated against him based on his race (he is
African-American) in setting his compensation between 2009
and 2011, and that Mr. Lane retaliated against him by firing
him when Mr. Belfiore threatened legal action over his pay.
Link had a somewhat complex compensation system. Each
employee was assigned a grade, but each grade has a broad
salary range, and a lower-grade employee might earn more than
a higher-grade one. Salaries were supplemented by two bonus
plans: the "annual incentive plan"
("AIP") bonus and "long term incentive
plan" ("LTIP") grants. AIP bonuses were a
percentage of total salary and increases based on grade. LTIP
grants were awarded from a pool of money tied to the
company's overall economic performance. The amount of the
pool was proposed initially by the CEO to the Board; once
approved, the CEO had broad flexibility to set individual
Belfiore received raises throughout the period from 2008 to
2011. His salary went from approximately $105, 000 in 2008 to
$130, 000 in 2011. His AIP bonuses and LTIP grants increased
his overall compensation in 2009 and 2010 by more than $90,
000 in each of those years, and he received a total of $195,
000 between salary and bonuses in 2011 before he was fired in
November of that year.
August 2011, after Mr. Belfiore had requested a raise after
negotiations, Mr. Lane agreed to raise Mr. Belfiore's
salary from $130, 000 to $172, 000, and the raise went into
effect for two pay periods. But on October 6, 2011, Mr. Lane
heard from Merchant Link's chief financial officer that
the increase needed Board approval, and that the higher
payments needed to be recouped, at least temporarily. Mr.
Lane gave Mr. Belfiore this news and assured him he would try
to persuade the compensation committee (i.e.,
Messrs. Charron and McCarthy) to approve the raise.
October 11, Mr. Lane asked human resources director Wendy
Nussbaum to prepare a request to the compensation committee
to increase Mr. Belfiore's salary. Ms. Nussbaum did so,
and included information about the salaries of positions at
Merchant Link that could be considered comparable to COO, as
well as a survey of local and nationwide COO compensation.
October 13, Mr. Lane wrote to Mr. McCarthy to recommend that
the company pay Mr. Belfiore at the higher rate. Mr. Lane
also informed Mr. McCarthy that Mr. Charron would support the
request. After some back-and-forth with Mr. Lane, on the
phone and via email, Mr. McCarthy wrote to Mr. Lane on
October 20 and denied the increase, pending deliberations by
the compensation committee. Mr. McCarthy asked Mr. Lane to
schedule a committee meeting.
October 21, Mr. Belfiore sent an email to Messrs. Charron,
McCarthy, and Lane, complaining that his compensation was not
adequate and attributing the shortfall to "your actions
and inaction" stemming from racial discrimination. Mr.
Belfiore wrote that he had no choice but "to initiate
the process of identifying a suitable legal resolution."
It was not until he received this email that Mr. McCarthy (a
First Data executive) became aware that Mr. Belfiore is
October 25, the compensation committee met, and, according to
an email from Mr. Lane to Messrs. McCarthy, Charron,
Nussbaum, and to Merchant Link's outside counsel Harry
Jones, requested additional information about Mr.
Belfiore's historical compensation, his role at the
company, and other executive compensation. Mr. Lane stated in
the email that he would schedule another committee meeting,
but the committee never met before Mr. Belfiore's
employment was terminated twelve days later.
November 8, Mr. Belfiore called a lower-level employee, Renee
Dantzler, into his office. According to Ms. Dantzler, Mr.
Belfiore asked her for help in undermining the company's
new customer relations management ("CRM") system,
used profanity, and upset her. The following day, Ms.
Dantzler reported the meeting to her supervisor Zack Minton,
and on November 10, put the incident in writing to Ms.
Nussbaum; Mr. Minton also wrote an email to Ms. Nussbaum and
Mr. Lane about the incident. No one talked to Mr. Belfiore.
November 11, Mr. Lane fired Mr. Belfiore. Messrs. McCarthy
and Charron testified that the Board had approved the
termination (although no evidence of a Board meeting
concerning the termination exists, and Merchant Link did not
call the two other Board members to testify at the
administrative hearing we will describe shortly).
Belfiore filed a complaint in December 2011 in the Montgomery
County Office of Human Rights ("OHR"). The Case
Review Board of the OHR's Commission on Human Rights (the
"Commission") referred the case for a hearing
before the Office of Zoning and Administrative Hearings.
After discovery, a hearing examiner conducted a six-day
evidentiary hearing. Ten witnesses testified and two
transcripts were admitted into evidence. The hearing examiner
issued a seventy-eight-page opinion on August 17, 2015,
recommending that the Commission find that Mr. Belfiore
failed to prove his claims under sections 27-19(a)(1) and
27-19(c)(1) of the Montgomery County Code. The Case Review
Board issued a final Decision and Order affirming the hearing
examiner's report and recommendation. We will discuss the
Decision and Order in greater detail in the Discussion below.
6, 2016, Mr. Belfiore sought judicial review of that decision
in the Circuit Court for Montgomery County. The circuit court
affirmed the Case Review Board's decision on November 16,
2016. This Court reviews the agency decision, which in this
case is the hearing examiner's report and recommendation,
as adopted in full by the agency. Flaa v. Manor Country
Club, 158 Md.App. 483, 494 (2004), rev'd on
other grounds, 387 Md. 297 (2005).