Alba v. Merrill Lynch & Co. , 198 F. App'x 288 ( 2006 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 05-1514
MICHAEL S. ALBA,
Plaintiff - Appellant,
versus
MERRILL LYNCH & CO; MERRILL LYNCH, PIERCE,
FENNER & SMITH, INCORPORATED,
Defendants - Appellees.
Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. Claude M. Hilton, District
Judge. (CA-04-647-1)
Argued: February 1, 2006 Decided: May 26, 2006
Before MICHAEL, SHEDD, and DUNCAN, Circuit Judges.
Affirmed in part and vacated and remanded in part by unpublished
opinion. Judge Shedd wrote the opinion, in which Judge Michael and
Judge Duncan joined.
ARGUED: Merril Jay Hirsh, ROSS, DIXON & BELL, L.L.P., Washington,
D.C., for Appellant. Stephen Edward Brown, MAYNARD, COOPER & GALE,
P.C., Birmingham, Alabama, for Appellees. ON BRIEF: Elizabeth
Sarah Gere, Rebecca Woods, Prashant K. Khetan, ROSS, DIXON & BELL,
L.L.P., Washington, D.C., for Appellant. Carole G. Miller, Stuart
D. Roberts, MAYNARD, COOPER & GALE, P.C., Birmingham, Alabama, for
Appellees.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
SHEDD, Circuit Judge:
Michael S. Alba sued his former employer, Merrill Lynch & Co.,
Inc. and Merrill Lynch, Pierce, Fenner & Smith, Inc. (collectively
referred to as “ML”),1 alleging a violation of the Age
Discrimination in Employment Act (the “ADEA”) and breaches of
various agreements. The district court granted summary judgment in
favor of ML, and Alba appealed. We affirm in part and vacate and
remand in part.
I.
We review de novo the grant of summary judgment. JKC Holding
Co. v. Washington Sports Ventures, Inc., 264 F.3d 459, 465 (4th
Cir. 2001). In conducting our review, we view the evidence in the
light most favorable to Alba. See Williams v. Staples, Inc., 372
F.3d 662, 667 (4th Cir. 2004).
Alba, a retired Air Force colonel, joined ML as a financial
advisor in its Northern Virginia region in 1988. At that time, he
signed a document acknowledging that all records (including the
names and addresses of its clients) are the property of ML and
would remain the property of ML even after Alba’s employment at ML
ended.
1
It is not clear which entity actually employed Alba. For
purposes of our review, we assume that Alba was employed by both.
2
In 1993, Alba entered into an agreement with another ML
financial advisor, Herbert Vogel, who was planning to retire in
1996. According to the Vogel agreement, Vogel and Alba pooled all
of their client accounts under Vogel’s ML financial advisor number,
and the two agreed to share compensation from their joint clients.
The agreement also provided that Vogel would “relinquish title to
all accounts to” Alba in 1996 when Vogel retired, and Alba would
thereafter “be the sole financial consultant responsible for all
accounts.” J.A. 267.
In the first year of this agreement, Vogel received 70% of the
compensation from the joint accounts, and Alba received 30%. These
percentages incrementally changed to Alba’s benefit in the
following years, so that by 1996, the last year of the agreement,
Alba received 80% of the compensation and Vogel received 20%. This
type of pooling agreement is referred to as selling a financial
advisor’s “book of business” to another financial advisor.
In 1992, before the Vogel agreement, Alba earned approximately
$80,000. Although Alba potentially risked reducing his income by
entering into the Vogel agreement, Alba’s income actually increased
to $107,000 in 1993, the first year of the agreement. In 1996, the
last year of the Vogel agreement, Alba’s annual compensation grew
to approximately $338,000. After the agreement ended, Alba’s
compensation continued to grow at a rapid pace, and in 2000 Alba
earned approximately $850,000. Alba’s book of business eventually
3
grew to approximately 1,200 clients, making him one of the largest
producers in ML’s Northern Virginia region.
In 2000, ML opened a new office in Reston, Virginia. ML asked
Alba to transfer to the Reston office so it could have a well-
established top producer there. ML offered Alba the first choice
of office space, and Alba agreed to the transfer.
When Alba moved to the new Reston office, he started a new
team, the Alba Group, with his son Chris, another ML financial
advisor. Although Alba had no plans to retire, his agreement with
Chris was somewhat similar to the Vogel agreement in that he and
Chris pooled their client accounts and shared compensation on an
80%/20% basis. In their agreement, the Albas acknowledged that ML
“at all times retains the right to assign customer accounts to the
Financial Advisors which it believes will best service those
customers.” J.A. 259. They also agreed not to solicit any account
or customer within a specified area upon termination of their
employment. The agreement also provided that members of the team
are “employees at will of [ML] who can quit [ML] or whom [ML] can
discharge at any time with or without cause.” J.A. 260.
The stock market performed poorly in 2000 through 2002. By
the spring of 2001, a few of Alba’s clients complained that Alba
was mishandling their accounts. In April 2001, Andrew Greene,
Alba’s immediate supervisor, reviewed Alba’s accounts and
determined that Alba had an overly aggressive, non-diversified
4
investment strategy for many of his older clients. Greene also
thought that there was too much margin trading in Alba’s client
accounts. Greene directed Alba to utilize a more conservative
investment strategy and to reduce the level of margin trading in
his client accounts. Other superiors also met with Alba and
advised him to diversify his client accounts and reduce margin
holdings to 5% of account balances.
By May 2002, the number of clients who had made complaints
against Alba had grown to more than ten. Most of these clients
were nearing or over 60 years old. The ML compliance officer
reviewed Alba’s client records and determined that Alba had not
reduced margin in his client accounts. Fifty-four of Alba’s
clients -- out of approximately 1,200 -- had margin balances of
over 50%, and twenty-three of these accounts were held by clients
over 60 years old.
By the end of May 2002, Peter DiCenso, the director of ML’s
Northern Virginia region, decided to fire Alba based on his poor
performance. DiCenso believed, however, that Alba might be able to
receive approximately $400,000 from two separate benefit plans
maintained by ML -- the Financial Advisor Capital Accumulation
Award Plan (the “FACAAP”) and the WealthBuilder Account Plan
(collectively “the Plans”) -- if Alba agreed to retire. DiCenso
directed Greene to urge Alba to retire.
5
On June 11, Greene had lunch with Alba and pressed him about
a recent complaint that had been made against Alba. Greene said
that it was time for Alba to retire so that he and his wife could
enjoy their “golden years.” J.A. 746. Greene also asked Alba,
who was then 62 years old, “[h]ow old are you anyway.” Id. Greene
assured Alba that he would be able to get all of his FACAAP and
WealthBuilder benefits if Alba agreed to retire, but Greene said
that Alba would not be allowed to sell his book of business.
Despite being pressured by Greene, Alba refused to retire.
Soon thereafter, DiCenso confronted Alba and his son Chris
with purported evidence of the Alba Group’s mishandling of several
of its client accounts. Some of the client accounts listed by
DiCenso, however, did not belong to the Alba Group. DiCenso
proposed to Alba that he retire so he could possibly get his FACAAP
and WealthBuilder benefits. To stress how dire Alba’s situation
was, DiCenso told Alba that he was in an “irreversible” position
and that the highest level officials at ML would probably terminate
Alba. J.A. 901. DiCenso also told Chris that he should resign and
that, if Chris refused to resign, he would be fired for cause and
ML would make it difficult for Chris to get a financial advisor
position with another firm. Soon after this meeting, Chris
resigned, and ML fired another young trainee in the Alba Group.
Alba lost approximately $120,000 he would have earned for mentoring
6
the trainee had ML allowed the trainee to complete the training
program.
A few days later, on June 21, ML disconnected Alba’s access to
ML’s computer system. DiCenso telephoned Alba three times that
day, inquiring whether Alba had decided to retire. In the first
conversation, Alba said that he needed more time to decide.
DiCenso told Alba that he could have until 6:00 p.m. that day.
DiCenso also warned Alba that he would lose his $400,000 “football”
of benefits under the FACAAP and WealthBuilder Plan if he refused
to retire. DiCenso made the second call shortly before 6:00 p.m.
Alba insisted that he did not want to leave ML. DiCenso replied
that Alba had just lost $400,000 by refusing to retire. Less than
a minute later, however, DiCenso called back and told Alba to
forget about their last conversation and that “we’ll work something
out next week.” J.A. 750. This last phone conversation lasted
about one minute.
Instead of waiting to discuss the matter further the following
week, Alba sent a letter of resignation to DiCenso the next day,
stating: “It is obvious that ML has intended to force my
resignation. The various actions taken against me, those who work
for me and my family have made my working conditions so intolerable
that no reasonable person could expect to work.” J.A. 106.
In his deposition in this case, Alba was questioned regarding
whether he had “the sense that if you did not resign from [ML] that
7
you would have been terminated?” Alba replied: “I can’t make that
conclusion . . . because Mr. DiCenso in that 60-second phone call
after the second phone call, said . . . ‘[w]e’ll talk about this
next week. We can maybe make an arrangement’” J.A. 196. Although
Alba doubted DiCenso’s sincerity, he believed that it was possible
that ML would work out some arrangement without terminating his
employment.
After Alba resigned, ML refused to pay Alba more than $450,000
in Alba’s FACAAP and WealthBuilder Plan accounts. ML also did not
allow Alba to sell his book of business. Instead, ML distributed
all of Alba’s accounts to other ML financial advisors.
II.
In his original complaint, Alba asserted that ML violated the
ADEA by constructively discharging him (Count I); that ML breached
the Vogel agreement and/or an implied agreement by disallowing him
from selling his vested interest in his book of business (Counts II
and III); that ML breached its agreement to pay, or should be
equitably estopped from denying him, benefits under the FACAAP and
WealthBuilder Plan (Count IV); that ML should be promissorily
estopped from depriving him of his vested interest in his book of
business (Count V); that ML fraudulently induced him to enter the
Vogel agreement while ultimately planning to seize his book of
business by forcing him to resign without compensating him (Count
8
VI); that ML was unjustly enriched by seizing his book of business
without compensating him (Count VII); that ML converted his book of
business by seizing it without compensating him (Count VIII); that
ML defamed him by making false representations about his
professional reputation (Count IX); that ML intentionally
interfered with his expectancy that he would continue to have a
business relationship with his clients (Count X); and that ML
intentionally inflicted emotional distress on him by seizing his
book of business and constructively discharging him (Count XI).
Alba agreed to the dismissal of Count V (Promissory Estoppel),
Count VI (Fraudulent Misrepresentation), and Count IX (Defamation).
The district court granted ML’s motion to dismiss Count VIII
(Conversion), Count X (Interference with Business Opportunity), and
Count XI (Intentional Infliction of Emotional Distress). Alba does
not appeal the dismissal of these six claims.2
After extensive discovery, ML moved for summary judgment.
Soon thereafter, Alba sustained serious injuries in a fall and was
hospitalized. Alba’s counsel moved to continue trial and to allow
Alba additional time to file an affidavit explaining some of his
statements in his deposition. In particular, Alba wanted to
clarify that he knew that ML was trying to force him out when he
2
After the district court dismissed Alba’s original claim
alleging intentional interference with a business opportunity, Alba
amended that count. The district court later granted summary
judgment in favor of ML on that count, and Alba does not appeal
that ruling.
9
resigned. The district court granted the motion to continue trial
but denied Alba’s request to file an additional affidavit,
concluding that Alba was not seeking to add new evidence but rather
was merely attempting to argue inferences from evidence already in
the record.
The district court thereafter granted summary judgment in
favor of ML on all of Alba’s remaining claims. Within ten days,
Alba filed a motion to alter or amend the judgment, and attached an
affidavit making several new allegations and explaining his
previous deposition testimony. ML moved to strike this new
affidavit.
The district court denied Alba’s motion to alter or amend the
judgment, and Alba timely filed a notice of appeal. Four days
after Alba filed his notice of appeal, the district court granted
ML’s motion to strike the new affidavit as “untimely filed.” J.A.
1964. Alba filed an amended notice of appeal to include the
district court’s order striking the new affidavit.
10
III.
A.
Alba argues that the district court erred by granting summary
judgment in favor of ML on his claim that ML constructively
discharged him based on his age.3 We disagree.
Under the ADEA, it is unlawful for an employer “to discharge
any individual or otherwise discriminate against any individual
with respect to his compensation, terms, conditions, or privileges
of employment, because of such individual’s age.” 29 U.S.C.
§ 623(a)(1). To establish a prima facie case of age discrimination
by constructive discharge under the McDonnell Douglas Corp. v.
Green, 411 U.S. 792 (1973), framework, Alba must establish the
3
Although Alba alleged only constructive discharge in his
complaint, we will also consider his additional claim advanced on
appeal that he was actually discharged.
Alba’s actual discharge claim lacks merit. While it is true
that the words “fired” or “terminated” need not be used by an
employer before an employee may deem himself actually discharged,
Honor v. Booz-Allen & Hamilton, Inc., 383 F.3d 180, 185 (4th Cir.
2004), a plaintiff may not resign and later claim he was actually
discharged if he did not think at the time of his resignation that
his termination was inevitable, see EEOC v. Service News Co., 898
F.2d 958, 960-62 (4th Cir. 1990)(ruling that sufficient evidence
supported finding of actual discharge in part because the plaintiff
concluded that she was being discharged based on her last
conversation with her supervisor). Alba stated in his deposition
that after his final conversation with DiCenso he thought that it
was possible that his employment at ML would not be terminated.
Thus, it is clear that Alba did not consider his employment
actually terminated when he resigned. Alba’s complaint confirms
Alba’s perception that his was a constructive rather than actual
termination. Alba alleges that he “submitted to [ML] a letter
recognizing his constructive discharge.” J.A. 76 (emphasis added).
11
following four elements: (1) he was constructively discharged; (2)
he was at least 40 years old at that time; (3) he was performing
his job duties at a level that met ML’s legitimate expectations at
the time of his constructive discharge; and (4) he was treated more
harshly than other similarly situated younger employees. See Hill
v. Lockheed Martin Logistics Mgmt., Inc., 354 F.3d 277, 285 (4th
Cir. 2004)(en banc); Cook v. CSX Transp. Corp., 988 F.2d 507, 511
(4th Cir. 1993) (establishing elements of prima facie case in
enforcement of disciplinary measures in race discrimination
context). It is undisputed that Alba satisfies the second element
because he was 62 years old when his employment terminated. We
also conclude that a question of fact exists whether Alba was
meeting his employer’s legitimate job expectations when his
employment terminated. We hold, however, that Alba has failed to
establish that he was constructively discharged and that he was
treated more harshly than similarly situated younger employees.
1.
Alba has failed to present evidence demonstrating that he was
constructively discharged. An employee who is not actually
discharged may be entitled to relief, if his employer intentionally
makes his working conditions intolerable in an effort to cause him
to resign. Honor, 383 F.3d at 186. Because constructive discharge
claims are susceptible to abuse by those who voluntarily leave
their employment, we have insisted that they be strictly cabined.
12
Id. at 187. To demonstrate constructive discharge, an employee
must prove (1) that the employer’s intentional actions were
motivated by age bias and (2) that the working conditions were
objectively intolerable. Id. at 186-87.
Assuming without deciding that Alba has sufficiently
established that ML’s efforts to force his resignation were
motivated specifically by age bias, Alba must demonstrate that his
working conditions were so objectively intolerable that a
reasonable employee would have been compelled to quit. See
Pennsylvania State Police v. Suders, 542 U.S. 129, 141 (2004).
Alba claims his working conditions were intolerable because his
supervisors, all of whom were much younger, unfairly criticized his
work. Although Alba concedes that a minute percentage of his
clients complained about how he was handling their accounts, he
insists that his trading practices were not as risky as the
practices of other younger financial advisors, including his
immediate supervisor. Alba also asserts that his supervisors tried
to make his working conditions intolerable by forcing his son to
resign and firing another trainee in the Alba Group at that same
time ML was trying to force him out, by threatening him with loss
of his FACAAP and WealthBuilder benefits if he refused to retire,
by telling some of his colleagues that his employment would be
terminated long before he ultimately left, and by disconnecting his
access to ML’s computer system.
13
While we agree that Alba’s allegations show that his working
conditions were difficult and stressful, we hold that they cannot
reasonably be described as intolerable. See Honor, 383 F.3d at
183-87 (concluding that plaintiff’s job conditions were not
intolerable even though he was told that he would be losing his job
and was subjected to racial hostility from a coworker); Williams v.
Giant Food Inc., 370 F.3d 423, 434 (4th Cir. 2004) (ruling that
allegations were insufficient to support charge of constructive
discharge even though supervisors yelled at plaintiff, gave her
poor evaluations, told her she was an incompetent manager,
criticized her in front of customers, and once insisted that she
work with an injury). Although Alba insists that his supervisors’
complaints against him were unwarranted, “a feeling of being
unfairly criticized, or difficult or unpleasant working conditions
are not so intolerable as to compel a reasonable person to resign.”
Carter v. Ball, 33 F.3d 450, 459 (4th Cir. 1994). Moreover,
despite the pressure that Alba was under to retire, he admitted in
his deposition that after his last conversation with DiCenso the
day before he resigned he still thought it was possible that ML
might work out some arrangement with him short of termination.
Alba also agreed that there was nothing preventing him from
returning to work the following work day and performing his duties
as a financial advisor.
14
2.
Alba has also failed to demonstrate that younger employees
similarly situated to him were treated more favorably. The person
most similarly situated to Alba was his son, Chris. Chris was part
of the Alba Group, and ML accused both Alba and Chris of the same
type of malfeasance relating to their shared client accounts.
Chris was forced to resign at about the same time that his father
resigned, so it is clear that ML did not treat Chris more favorably
even though he was much younger.
Alba, nevertheless, argues that ML’s treatment of Peter Russo,
a 32 year old financial advisor, demonstrates that ML treated
younger employees more favorably. Alba claims that Russo received
slightly fewer client complaints than he did, but that Russo had a
much smaller client base and that some of the complaints against
Russo involved substantially greater investment losses than the
complaints against him. Alba contends that Russo, despite
receiving a much higher percentage of, and more serious, complaints
than Alba, was treated more favorably because he was merely placed
on probation and not forced out of his job.
In determining whether Alba has presented evidence that ML
treated him less favorably than other younger employees, we must
compare the treatment he received with the treatment received by
persons outside his protected class for similar conduct. See Cook,
988 F.2d at 511. In other words, Alba must show that Russo engaged
15
in similar conduct and that ML treated Russo less harshly than
Alba.
Although we assume without deciding that Russo engaged in
conduct comparable in seriousness to Alba,4 we conclude that Alba
has failed to demonstrate that ML treated Russo less harshly under
the circumstances. Soon after the initial complaints were lodged
against Russo, ML disciplined him by prohibiting him from managing
any of his group’s existing investment accounts and by restricting
him solely to prospecting for new clients. Because Russo had been
trading excessively in his personal account, ML also transferred
his personal account to another financial advisor to manage. ML
received no further complaints against Russo for work performed
after he was relieved of his account management duties.
By contrast, ML took no immediate tangible action against Alba
when ML received the initial client complaints against him.
Instead, ML directed Alba to reduce margin trading in his client
accounts and to utilize a more conservative investment strategy.
It was more than a year later -- after Alba received several more
client complaints and after ML discovered that margin balances were
4
Whether there is evidence that Russo’s and Alba’s conduct
should be considered comparable is a close question. Although one
of the primary complaints against both Russo and Alba is that they
placed their clients in risky, high-tech stocks, it appears that
there were other important differences in the complaints against
them. For instance, Alba was accused of unauthorized margin
trading but Russo was not. Moreover, most of the clients who made
complaints against Alba were older and less risk-tolerant than the
younger and more risk-tolerant clients that Russo advised.
16
still very high in many of Alba’s client accounts -- that ML urged
Alba to retire. Moreover, even though Alba made more trades in his
personal account than Russo, Alba was allowed to continue managing
his personal account. In light of the fact that ML immediately
disciplined Russo but gave Alba an opportunity for more than a year
to improve his client accounts, we conclude that Alba has failed to
demonstrate that ML treated him more harshly than Russo.5
In sum, Alba has failed to establish that he was
constructively discharged and that he was treated more harshly than
similarly situated younger employees. Thus, we conclude that the
district court properly granted summary judgment in favor of ML on
Alba’s ADEA claim.
B.
Alba next argues that the district court erred by granting
summary judgment on his claims alleging that ML violated his right
5
An alternative basis exists for our ruling that Alba has
failed to establish that he was treated more harshly than younger
employees. ML produced evidence that it discharged two other
younger employees -- in addition to Chris Alba -- who received
fewer complaints than Alba. Thus, even if Alba could show that he
was treated more harshly than Russo, it is clear that the record as
a whole does not give rise to a reasonable inference that Alba was
discriminated against because of his age. See Cook, 988 F.2d at
512 (“A plaintiff seeking to establish a prima facie case by
relying on a broad history of disciplinary enforcement cannot
fairly claim that an inference of . . . discrimination should be
drawn from one factual circumstance taken out of the context of the
disciplinary treatment generally afforded by the employer for
conduct similar to that of the plaintiff”).
17
to be compensated for selling his book of business to other ML
financial advisors. Alba contends he has presented sufficient
evidence to support a claim for breach of express contract, implied
contract, and unjust enrichment. We disagree.
In support of his express contract claim, Alba relies on a
provision in the 1993 Vogel agreement that states: “As of January
1st 1996, or there about, Herb Vogel will relinquish title to all
accounts to Mike Alba and Mike will be the sole financial
consultant responsible for all accounts.” J.A. 267 (emphasis
added). Alba claims that this provision gave him a legal interest
in all the accounts that were transferred to him in 1996 and a
right to be compensated for transferring his book of business to
other financial advisors at ML.
In the alternative, Alba claims that he had an implied
contractual right to be compensated for transferring his book of
business. This implied right, he contends, is based on the fact
that pooling agreements like the Vogel agreement are a common
mechanism at ML by which retiring financial advisors receive
compensation for transferring their book of business. According to
Alba, it was understood and expected that each financial advisor
could sell his book of business. Alba’s unjust enrichment claim is
also based on the premise that ML knew that Alba expected that he
would be compensated when he later transferred his accounts to
another ML financial advisor.
18
All of Alba’s alternative claims suffer from the same fatal
flaw. Even assuming that the 1993 Vogel agreement or some other
implied agreement granted Alba title to his accounts and some sort
of right to later transfer them for compensation, Alba relinquished
any such right when he entered into the Alba Team Agreement. In
that agreement, Alba specifically agreed that ML “at all times
retains the right to assign customer accounts to the Financial
Advisors which it believes will best service those customers” and
that ML could “discharge [Alba] at any time with or without cause.”
J.A. 259-60. The only evidence of any agreed practice of allowing
one financial advisor to sell his book of business to another
financial advisor occurred during a transition period in which both
the “selling” and the “buying” financial advisors agreed to share
compensation from joint clients while both financial advisors
remained employed by ML. Alba has pointed to no evidence that any
“selling” financial advisor was paid any compensation for his book
of business after his employment terminated.6 Because Alba’s
employment terminated, Alba was not entitled to any additional
compensation for any of the client accounts he formerly held, and
ML expressly had the right under the Alba Team Agreement to
reassign those accounts.
6
Alba stated that he expected to be allowed to enter into an
arrangement similar to the Vogel Agreement “to transition business
before leaving [ML].” J.A. 1918 (emphasis added).
19
C.
Alba also argues that ML breached the FACAAP and WealthBuilder
Plan by failing to pay him more than $450,000 in vested benefits.
In the alternative, Alba claims that ML should be equitably
estopped from refusing to pay him benefits under the Plans. We
conclude that the district court properly granted summary judgment
in favor of ML on these alternative claims.
1.
The FACAAP is a benefit plan intended to reflect ML’s
“commitment to reward top producing” financial advisors and to
“establish and retain a strong sales force [of financial advisors]
. . . by recognizing the benefits of their contributions to” ML.
J.A. 1395. The WealthBuilder Plan shares many of the same
administrative provisions of the FACAAP, but is available only to
a more select group of ML financial advisors. The WealthBuilder
Plan “is maintained primarily for the purpose of providing deferred
compensation for [the top 15% earners] who remain in the employ of
[ML] until retirement or completion of a substantial period of
service.” J.A. 1420.
Benefits under both plans are based on a percentage of revenue
that the financial advisor produces for ML. If a financial advisor
meets all of the revenue production goals established by ML for a
given performance period, ML calculates the “award” the financial
advisor has earned and credits his account with that amount.
20
Awards are based solely on the revenue production of each
individual financial advisor and are not contingent on ML’s overall
financial performance. It is undisputed that Alba met the revenue
production eligibility requirements to participate in the FACAAP
and WealthBuilder Plan most of his thirteen years at ML (except,
for instance, during the Vogel agreement years), and that more than
$456,000 was credited to Alba’s Plan accounts by June 2002.
Under the FACAAP and the WealthBuilder Plan, ML pays credited
awards when a participant retires. “Retirement” is defined broadly
and includes “when you cease employment on or after your 55th
birthday and you have completed at least 10 years of service.”
J.A. 1397.7 ML concedes that Alba qualifies for “Retirement” under
the Plans even though he specifically resigned rather than retired
in July 2002. However, both Plans allow for the “forfeiture” of
account balances if ML determines that the participant engaged in
misconduct.
Alba argues that he satisfied all the objective criteria to be
eligible for benefits under both Plans. Thus, he contends that the
awards credited to his Plan accounts constitute earned wages that
cannot be forfeited.
ML, on the other hand, argues that it paid Alba all the wages
he was due each year under his normal salary/commission agreement
7
The WealthBuilder Plan uses the term “Qualifying Termination”
instead of “Retirement,” but the two definitions are similar. J.A.
1423.
21
with ML. ML contends that the amounts credited to Alba under the
FACAAP and the WealthBuilder Plan were discretionary “incentive
compensation” payments that could be forfeited for several
different reasons, including misconduct. Because allegations of
misconduct were levied against Alba by numerous clients, ML insists
that it had discretion to deem Alba’s account balances forfeited.
The parties agree that whether ML breached the FACAAP and
WealthBuilder Plan by not paying the Plan benefits is a question
governed by New York law. “Wages” are defined under New York law
as: “the earnings of an employee for labor or services rendered,
regardless of whether the amount of earnings is determined on a
time, piece, commission or other basis.” N.Y. LAB. LAW § 190.1.
Despite this broad definition, wages do not include incentive
compensation benefits. Truelove v. Northeast Capital & Advisory
Inc., 702 N.Y.S.2d 147, 149 (N.Y. App. Div. 2000). “The
dispositive factor in determining whether compensation constitutes
wages is not the labeling of the plan but whether the compensation
is vested and mandatory as opposed to discretionary and
forfeitable.” Id. Receipt of a separate nondiscretionary salary
generally negates an inference that benefits payable under another
benefits plan constitute wages. See International Bus. Mach. Corp.
v. Martson, 37 F. Supp. 2d 613, 618 (S.D.N.Y. 1999).
ML paid Alba a regular salary each year under a fixed
compensation schedule based on sales commissions. These payments
22
were nondiscretionary and not forfeitable. Alba does not dispute
that ML paid him all the sales commissions he was due under his
regular salary. The benefits payable under the FACAAP and
WealthBuilder Plans, however, were discretionary and forfeitable.
Both of the Plans contain provisions stating that the benefits can
be forfeited and that ML retains the right to determine if the
benefits in the account balances should be forfeited under the
terms of the Plans. Thus, even though benefits under the Plans are
calculated based solely on Alba’s level of production, the benefits
under both Plans are discretionary and forfeitable under certain
circumstances specified under the Plans. Therefore, we conclude
that the amounts credited to Alba’s account balances in both Plans
do not constitute earned wages and, therefore, can be forfeited.
2.
Alba also argues that ML should be equitably estopped from
refusing to pay the amounts credited to account balances under the
FACAAP and the WealthBuilder Plan. Alba claims that ML effectively
offered to pay him benefits under the Plans if he agreed to leave
ML. Because he left ML, Alba contends that ML cannot “go back on
its word and refuse to pay the awards.” Alba Brief p. 51.
The elements essential to establish equitable estoppel are:
(1) a representation was made to the plaintiff (2) upon which the
plaintiff relied, and (3) the plaintiff then changed his position
(4) to his detriment. Waynesboro Vill., L.L.C. v. BMC Props., 496
23
S.E.2d 64, 68 (Va. 1998).8 Viewing the evidence in the light most
favorable to Alba, ML, by its agents DiCenso and Greene,
represented to Alba that he would be paid his account balances
under the FACAAP and the WealthBuilder Plan if he agreed to retire.
As Alba admitted in his deposition, he understood that there was a
difference between retiring and resigning when he decided to
resign. Thus, it is clear as a matter of law that Alba did not
rely on ML’s representation that he would be paid benefits if he
retired.9
D.
Alba also argues that ML owes him approximately $15,000 under
its Deferred Compensation Plan. ML failed to respond to this
argument in its brief. We vacate the grant of summary judgment in
8
ML argues that Alba’s equitable estoppel claim fails under
Virginia law. Alba does not cite Virginia or New York law in
support of his equitable estoppel claim. We note, however, that
the elements of equitable estoppel under New York law are similar
to the Virginia elements, see Town of Hempstead v. Incorporated
Vill. of Freeport, 790 N.Y.S.2d 518, 520 (N.Y. App. Div. 2005), so
the same result attains under either state law.
9
Alba contends that the distinction in ML’s representation
between retiring and resigning is arbitrary in light of the fact
that Alba was later deemed to be retired -- even though he resigned
-- under the broad definition of “Retirement” under the Plans.
There is no evidence, however, that Alba was relying on the Plan
definitions when he decided to resign rather than retire.
Moreover, Alba alleges in his complaint that even after he
resigned, DiCenso offered to give Alba his benefits if he would
agree to come back to ML and retire. Alba clearly knew there was
a significant difference between retiring and resigning for
purposes of DiCenso’s offer.
24
favor of ML on this claim and remand to the district court for
further proceedings.
E.
Alba next argues that the district court lacked jurisdiction
to grant ML’s motion to strike Alba’s affidavit -- which was
attached to his motion to alter or amend judgment -- four days
after Alba filed his initial notice of appeal. Alba further argues
that his affidavit was properly filed and creates genuine issues of
material fact precluding summary judgment in favor of ML.
For purposes of our review, we assume without deciding that
the district court lacked jurisdiction to strike Alba’s affidavit.
Thus, we address Alba’s ultimate contention that his affidavit
establishes facts requiring reversal of the district court’s grant
of summary judgment.
In support of its assertion that Alba was not constructively
or actually discharged but instead voluntarily chose to resign, ML
relies in part on the following portion of Alba’s deposition
testimony in which Alba references his final conversation with
DiCenso the day before Alba resigned:
Q: [D]id you have the sense that if you did not
resign from [ML], that you would have been
terminated?
Alba: I can’t make that conclusion.
Q: You don’t know one way or the other whether or
not you’d have been terminated?
25
Alba: No, because Mr. DiCenso in that 60-second
phone call after the second phone call, said
that, “maybe we can work -” words to the
effect that “Maybe we can – We’ll talk about
this next week, we can maybe make an
arrangement, or something.” Okay, but, um,
no.
Q: So it was possible [ML] had contemplated
working out some sort of arrangement with you,
short of terminating you.
Alba: Yes.
J.A. 196.10
Despite this testimony, Alba states in his new affidavit that
in the weeks leading up to his resignation ML “made it absolutely
clear to me that there was no possibility that I could continue to
10
Alba was deposed by ML on three days. The last day of
deposition was approximately two months after the first two days.
On his last day of deposition, Alba testified that he could not
remember DiCenso saying that they would get together the next week
and “work something out.” J.A. 1636. After ML’s counsel showed
Alba the transcript of his contrary testimony from his earlier
deposition, Alba agreed that DiCenso did say in their last phone
conversation that they should get together the next week and “work
it out.” J.A. 1638. However, Alba added that he felt that DiCenso
had no intention of working things out.
Alba’s subsequent deposition testimony casting doubt on the
sincerity of DiCenso’s intentions does not create a genuine issue
of material fact on Alba’s constructive or actual discharge claims.
Regardless of whether Alba believed that DiCenso would help Alba
“work things out,” Alba testified that he believed at the time he
resigned that it was possible that ML would not terminate him.
Alba further testified that (apart from his resignation) there was
nothing preventing him from going back to work the following Monday
and performing his duties as a financial advisor at ML.
26
work at” ML. J.A. 1935 (emphasis added). Alba further insists in
his affidavit that any implication derived from his prior
deposition testimony that he believed that he might be able to
continue his employment at ML “is the opposite of what I meant.”
Id.Alba’s subsequent affidavit statements contradict his
deposition testimony. Alba’s deposition testimony clearly
establishes that Alba believed at the time he resigned that it was
possible that he would be allowed to continue his employment at ML.
It is well recognized that a plaintiff may not avoid summary
judgment by submitting an affidavit that conflicts with earlier
deposition testimony. See Barwick v. Celotex Corp., 736 F.2d 946,
960 (4th Cir. 1984). “A genuine issue of material fact is not
created where the only issue of fact is to determine which of the
two conflicting versions of the plaintiff's testimony is correct.”
Id. “If a party who has been examined at length on deposition
could raise an issue of fact simply by submitting an affidavit
contradicting his own prior testimony, this would greatly diminish
the utility of summary judgment as a procedure for screening out
sham issues of fact.” Id. (quoting Perma Research and Development
Co. v. The Singer Co., 410 F.2d 572, 578 (2nd Cir. 1969)). Alba’s
affidavit statements attempting to explain and refute his earlier
deposition testimony do not create a genuine issue of material fact
27
regarding whether he was constructively or actually discharged by
ML.11
IV.
For the foregoing reasons, we affirm the district court’s
grant of summary judgment in favor of ML as to all claims except
for Alba’s deferred compensation claim. We vacate that portion of
the judgment and remand for further proceedings.
AFFIRMED IN PART AND
VACATED AND REMANDED IN PART
11
Alba’s 25-page affidavit contains assertions of fact that are
largely cumulative to evidence already in the record. We have
reviewed the entire affidavit, but none of the statements creates
any genuine issue of material fact precluding summary judgment on
the issues before us.
28