United States District Court, D. Maryland, Southern Division
MEMORANDUM OPINION
GEORGE
J. HAZEL UNITED STATES DISTRICT JUDGE
Plaintiff
Benchmark Electronics, Inc. brought this action pursuant to
the Federal Arbitration Act (“FAA”), 9 U.S.C.
§§ 1 et seq., to vacate a final
arbitration award in favor of Defendant Nick Myers. ECF No.
1. Defendant has filed a Motion to Dismiss, ECF No. 6, and a
Motion to Confirm Arbitration Award, ECF No. 7. Plaintiff
opposed those motions and filed a Cross-Motion for Summary
Judgment. ECF No. 14. Also pending are Defendant's Motion
to Seal Exhibits to his Motion to Confirm Arbitration Award,
ECF No. 8, Motion to Strike Plaintiff's Cross-Motion for
Summary Judgment, ECF No. 20, and Motion to Seal Exhibits to
Reply in Support of the Motion to Strike, ECF No. 26, and
Plaintiff's Motion to File Under Seal Exhibits to
Cross-Motion for Summary Judgment, ECF No. 16.[1] No hearing is
necessary to resolve the pending motions. See Loc.
R. 105.6 (D. Md. 2016). For the following reasons,
Defendant's Motion to Dismiss is denied, Defendant's
Motion to Confirm Arbitration Award is granted, and
Plaintiff's Cross-Motion for Summary Judgment is denied.
Defendant's Motion to Strike Plaintiff's Cross-Motion
for Summary Judgment is denied, and the various sealing
motions are denied.
I.
BACKGROUND
A.
Factual Background
On
September 21, 2016, Defendant Nick Myers accepted a position
as Segment Vice President, Defense with Plaintiff Benchmark
Electronics, Inc. ECF No. 15 at 62.[2] The offer letter stated that
Defendant's base salary would be $220, 000 and he would
receive $80, 000 in restricted stock options. ECF No. 15 at
61. The offer letter also described two bonus plans for which
Defendant would be eligible. The Sector Vice President
Business Development Initiative Plan (“Sector Vice
President bonus plan”) would provide, based on meeting
a sector bookings target, a bonus potential of 50% of the
base salary, and the Long-Term Incentive Plan
(“LTIP”) would provide a bonus potential of 40%
of the base salary, with vesting requirements. Id.
By accepting the position with Plaintiff, Defendant forfeited
certain compensation benefits from his previous employer, BAE
Systems, where he was Vice President of Business Development
and Strategy. ECF No. 8-2 at 2.
In
addition to the offer letter, Defendant signed a Confidential
Information, Proprietary Rights and Arbitration Agreement
(“Agreement”). ECF No. 7-4. The Agreement
provided that the parties would resolve any disputes or
claims arising from, concerning, or relating to the
employment relationship through final and binding
arbitration. Id. The Agreement also contained
provisions stating that the parties were “giving up
their normal rights of appeal following the rendering of a
decision except as applicable law provides for judicial
review of arbitration proceedings, ” and that
“[a]ll information regarding the dispute or claim or
mediation or arbitration proceedings, including the mediation
or arbitration award, will not be disclosed by [the parties]
or any mediator or arbitrator to any third party without the
written consent of [the parties] or unless otherwise
permitted or required by applicable law, as determined by the
arbitrator.” Id.
After
Defendant officially began his employment with Plaintiff in
October 2016, it became apparent that the Sector Vice
President bonus plan was still in development and did not yet
exist. ECF No. 8-2 at 14-18. Plaintiff also provided
misinformation regarding how the sector bookings target would
be measured for the purpose of calculating Defendant's
2016 bonus and whether the 2016 bonus would even be based on
sector bookings, as was stated in the offer letter, or
whether it would be based on corporate performance instead.
ECF No. 8-2 at 18-21. On February 18, 2017, Defendant
submitted his resignation because he felt Plaintiff could not
be trusted, and he eventually accepted a position with his
old employer, BAE Systems, at a reduced salary and with a
less generous compensation package than the one he had prior
to departing. ECF No. 8-3 at 6-7. Plaintiff never paid
Defendant his 2016 bonus because he resigned before the
vesting period was complete. ECF No. 8-2 at 21-22.
On
September 25, 2017, pursuant to the parties' Agreement,
Defendant filed an arbitration demand against Plaintiff
before the American Arbitration Association
(“AAA”). ECF No. 8-4. He asserted claims for
breach of contract, intentional misrepresentation, negligent
misrepresentation, and violation of the Maryland Wage Payment
and Collection Law (“MWPCL”), Md. Code Ann., Lab.
& Empl. § 3-501 et seq. based on Plaintiff
“intentionally inducing [him] to resign from his
position as Vice President Business Development and Strategy
at BAE with promises that his acceptance of a position at
[Plaintiff] would enable [him] to earn much higher
compensation package than his prior employment if his Sector
met certain objectives. [Plaintiff] refused to compensate
[him] after meeting the targeted objectives.” ECF No.
8-4 at 2-3.
Dr.
Andrée Y. McKissick (the “Arbitrator”)
presided over a bifurcated arbitration proceeding; she issued
a liability award on July 9, 2018 and a damages award on
January 3, 2019. ECF Nos. 8-2, 8-3. In the liability award,
the Arbitrator found that Plaintiff had committed intentional
misrepresentation, negligent misrepresentation, and breach of
contract and had violated the MWPCL. ECF No. 8-2 at 24.
Specifically, she found that Plaintiff had made contradictory
and false representations about the existence of the Sector
Vice President bonus plan and the basis for Defendant's
2016 bonus, Plaintiff had breached its contract with
Defendant with respect to the calculation of his 2016 bonus,
and, under the MWPCL, Plaintiff owed Defendant his 2016 bonus
notwithstanding his 2017 resignation. Id. at 15, 16,
21, 22.
The
Arbitrator separately awarded Defendant a total of $1, 383,
736.15 in damages. ECF No. 8-3 at 16. First, she awarded
compensatory damages of $660, 047.00 based on the difference
between Defendant's BAE Systems compensation package
prior to leaving for Benchmark and his compensation package
when he returned to BAE Systems. Id. The Arbitrator
determined that Defendant was entitled to these compensatory
damages because, “much akin to constructive discharge
in analysis, ” Plaintiff's intentional
misrepresentation, negligent misrepresentation, breach of
contract, and violation of MWPCL caused Defendant to lose
trust in the company. Id. at 9-10. “This was
emotionally undermining for him, notwithstanding the higher
amount of income that was offered but contradicted verbal
assertions. Applying this standard to any claimant who was
defrauded through concealment and misrepresentation as well
as the usage of falsehood, that claimant would not choose to
stay with such a company. Thus, the reasonable person would
choose to cut his economic losses and leave this
employment.” Id. at 10.
In
addition to compensatory damages, the Arbitrator awarded
punitive damages of $660, 047.00, as well as treble damages
of $63, 642.15 under the MWPCL based on the bonus Defendant
should have received for the work he performed for Plaintiff
in 2016. Id. at 16. She declined to award attorney
fees or prejudgment interest. Id. On February 6,
2019, the Arbitrator also declined Defendant's request
for post-judgment interest. ECF No. 15-5.
B.
Procedural Background
On
January 25, 2019, Plaintiff filed a Complaint to Vacate Final
Arbitration Award (“Complaint”) in this Court
with respect to the damages award. ECF No. 1. On April 8,
2019, Defendant filed a Motion to Dismiss, ECF No. 6, and a
Motion to Confirm Arbitration Award, ECF No. 7. On May 3,
2019, Plaintiff filed an opposition to Defendant's Motion
to Dismiss, ECF No. 13, and a consolidated Cross-Motion for
Summary Judgment and Opposition to Defendant's Motion to
Confirm Arbitration Award (“Plaintiff's
Cross-Motion for Summary Judgment”), ECF No. 14. On May
17, 2019, Defendant filed a Motion to Strike Plaintiff's
Cross-Motion for Summary Judgment (“Motion to
Strike”), ECF No. 20, and a consolidated opposition to
Plaintiff's Cross-Motion for Summary Judgment and reply
in support of his Motion to Confirm Arbitration Award, ECF
No. 22. On May 31, 2019, Plaintiff filed a reply in support
of its Cross-Motion for Summary Judgment, ECF No. 23, and an
opposition to Defendant's Motion to Strike, ECF No. 24.
Defendant filed a reply in support of his Motion to Strike on
June 7, 2019. ECF No. 25.
The
parties have also filed several sealing motions. Defendant
filed a Motion to Seal Exhibits to his Motion to Confirm
Arbitration Award (“Defendant's First Motion to
Seal”) on April 8, 2019. ECF No. 8. Following
Defendant's lead, Plaintiff filed a Motion to Seal
Exhibits to its Cross-Motion for Summary Judgment on May 3,
2019. ECF No. 16. On June 7, 2019, Defendant filed a Motion
to Seal Exhibits to his reply brief in support of his Motion
to Strike (“Defendant's Second Motion to
Seal”). ECF No. 26. The sealing motions are unopposed.
II.
DEFENDANT'S MOTION TO DISMISS
Defendant
contends that Plaintiff's Complaint must be dismissed
pursuant to Federal Rules of Civil Procedure 12(b)(1) and
12(b)(6) because the case was filed in violation of the
Agreement's confidentiality clause, is prohibited by the
defense of arbitration and award, fails to comply with the
FAA, is untimely, and fails to include any legal authority.
A.
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