United States District Court, D. Maryland
DEBORAH K. CHASANOW UNITED STATES DISTRICT JUDGE
pending and ready for resolution in this employment contract
case are the petition to vacate arbitration filed by
Plaintiff David Balch (ECF No. 1), the cross motion to
confirm arbitration award filed by Defendant Oracle
Corporation, (ECF No. 7), and the joint motion to seal filed
by both parties, (ECF No. 4). The issues have been fully
briefed, and the court now rules, no hearing being deemed
necessary. Local Rule 105.6. For the following reasons, the
petition to vacate will be denied, and the motion to confirm
will be granted, as will the motion to seal.
Factual and Procedural Background
David Balch joined Oracle Corporation (“Oracle”)
in 2005. (ECF No. 1-1, at 200). For the next ten years, he
worked in Oracle's National Security Group as a Vice
President of Software Sales. (Id.). In 2014, Mr.
Balch announced that he planned to retire at the end of the
year. (Id.). Mr. Balch's boss, Glen Dodson,
requested that Mr. Balch stay on to close a large government
contract that would come to be known as the “Mega
Deal.” (Id., at 201). Mr. Balch agreed, and
instead of retiring, signed onto a new contract, known as the
Fiscal Year 2015 Individualized Compensation Plan (“the
2015 Compensation Plan”). (Id., at 203). The
terms of that contract - which form the basis of this dispute
- are discussed at length below. Mr. Balch ultimately closed
the Mega Deal, earning Oracle about $150 million in revenue.
(Id., at 201).
months later, after following through on his plans to retire,
Mr. Balch received a bonus pursuant to the 2015 Compensation
Plan. Oracle's ultimate bonus payment for the Mega Deal
amounted to only $904, 908, well shy of the $3, 950, 454
which Mr. Balch believed he was owed. (Id., at 14).
Pursuant to the 2015 Compensation Plan, Mr. Balch issued a
Demand for Arbitration to both Oracle and Mr. Dodson. (ECF
No. 1-1, at 200).
ensued before a single arbitrator (“The
arbitrator”). (Id., at 200). After a Motion to
Dismiss Demand for Arbitration, the arbitrator dismissed Mr.
Dodson from the case, and discovery - complete with several
depositions - commenced. (Id., at 203). Following
discovery, both Mr. Balch and Oracle filed motions pursuant
to JAMS Rule 18, which the arbitrator treated as motions for
summary judgment under Fed.R.Civ.P. 56. (Id.). An
oral hearing was conducted.
arbitrator ruled for Oracle on both the remaining counts in
Mr. Balch's Demand. In so doing, The arbitrator
determined that 1) there were no material facts in dispute
that would require a hearing on the merits, 2) Oracle did not
breach Mr. Balch's 2015 Compensation Plan by its decision
not to pay him a larger bonus, and 3) Oracle did not violate
the Maryland Wage Payment and Collection Law
(“MWPCL”) by breaching either the 2015
Compensation Plan or by failing to pay Mr. Balch wages which
were “due” to him. (Id., at 203-04).
Balch filed a Petition to Vacate Arbitration Award in the
Circuit Court for Howard County, Maryland, which Oracle
removed to this court on May 8, 2019. (ECF No. 1). A week
later, Oracle filed its motion to Confirm Arbitration Award.
(ECF No. 7).
at issue in the award was the interpretation of the 2015
Compensation Plan. This contract was made up of two
documents: the “Fiscal Year 2015 Incentive Compensation
Plan” (“the Incentive Plan”), (ECF No. 3,
at 98) and the “FY15 Incentive Compensation Terms &
Conditions” (“the Terms and Conditions”),
(Id., at 112-207). The former purported to contain
an individualized means of calculating Mr. Balch's bonus
payments, while the latter described “the generally
applicable provisions” of Oracle's compensation
plans which would also apply to Mr. Balch.
text of Mr. Balch's 2015 Compensation Plan contained one
significant difference from his plan for 2014: in 2014, Mr.
Balch's Incentive Plan capped Mr. Balch's bonus at
250% of a measure referred to as Mr. Balch's
“Annual Target Variable” - essentially a target
for the revenue Mr. Balch was expected to generate. (ECF No.
1-1, at 206). The 2015 Incentive Plan had no such cap,
arguably suggesting - at least in Mr. Balch's reading -
that he would be owed a potentially far greater bonus were he
to exceed his Annual Target Variable of $301, 636.
(Id., at 211). In his Demand, and in his subsequent
motion for summary judgment, Mr. Balch contended that the
removal of the cap - and the likely subsequent receipt of a
far greater bonus as a result of the Mega Deal - induced him
to stay on in 2015. (Id., at 35-36).
arbitrator determined that Mr. Balch was wrong for two
reasons. First, he determined that “[t]here [was] no
evidence that Oracle intentionally singled out Mr. Balch to
receive an uncapped FY 2015 Compensation Plan. One might
speculate that the company uncapped his plan as a reward for
postponing his retirement. Such a theory would be mere
speculation[.]” (Id., at 215). The arbitrator
determined this by reference to virtually every piece of
evidence in the arbitral record, including the deposition
testimony of numerous Oracle executives. (Id., at
the arbitrator carefully parsed the language of the contract
to determine 1) that provisions in those documents
“authorized Oracle to impose a cap on Mr. Balch's
FY 2015 bonus plan when correcting an Administrative Error,
” and 2) that the failure to include a bonus cap
constituted an “Administrative Error” under the
contractual definition of that term. (Id., at
211-12). In both cases, he cited liberally and accurately
from the contract, referencing virtually every relevant
clause of the contract in the process.
the MWPCL claim, the arbitrator devoted eight pages to a
thoughtful analysis of relevant Maryland law. (Id.,
at 218-26). In so doing, he discussed the handful of
precedents the parties had raised, ultimately concluding that
a few were apposite, a few were not, and one, Hausfeld v.
Love Funding Co., 131 F.Supp.3d 443 (D. Md. 2015),
“is wrong” and “misse[d] the point
that” the other cases had raised regarding similar
compensation language. The arbitrator concluded that the
language in the 2015 Compensation Plan comported with the
contractual language analyzed in a line of Maryland cases
“that deal with plan documents that authorize the
employer to modify a bonus plan at any time before the bonus
is paid, ” and thus that Mr. Balch's bonus was not
a “wage.” (ECF No. 1-1, at 218, 225).
Standard of Review
of an arbitrator's award is severely circumscribed;
indeed, the scope of review is among the narrowest known at
law because to allow full scrutiny of such awards would
frustrate the purpose of having arbitrations at all -
i.e., the quick resolution of disputes and the
avoidance of the expense and delay associated with
litigation. See Apex Plumbing Supply, Inc. v. U.S. Supply
Co., Inc., 142 F.3d 188, 193 (4th Cir. 1998).
If there is a valid contract between the parties providing
for arbitration, and if the dispute resolved in the
arbitration was within the scope of the arbitration ...