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Stevenson v. Branch Banking and Trust Corp.11/17/2004
Branch Banking and Trust Company (BB&T;, appellee and cross-appellant, fired Senior Vice President J. Diane Stevenson, appellant and cross-appellee, because her leadership of the bank's Maryland Region did not satisfy its post-merger expectations. Stevenson sued BB&T;for breach of her written employment contract and for violation of the Maryland Wage Payment and Collection Law (the Wage Payment Act). See Md. Code (1991, 1999 Repl. Vol., 2004 Cum. Supp.), ยง 3-501 et seq. of the Labor & Employment Article (LE). Both of Stevenson's claims arise from BB&T;s contractual obligation to pay "Termination Compensation" equal to Stevenson's "annual cash compensation" before her termination. The jury's special verdict was in Stevenson's favor on both counts, but the court ordered a remittitur, reducing the award to $60,540.00.
Stevenson asks us to reverse the judgment, arguing inter alia that it was too small because, in calculating the amount of severance that the bank owed under the terms of her employment contract, the court erroneously prevented the jury from considering earnings from the exercise of bank stock options that generated a significant portion of her compensation package. BB&T;cross-appeals, arguing inter alia that the Wage Payment Act does not extend to an employer's failure to pay severance.
On a question of first impression regarding whether the Wage Payment Act affords relief to employees claiming severance pay, we conclude that non-payment of severance pay representing deferred compensation for services performed during the employment may be grounds for relief under the Act. In this instance, however, the Termination Compensation owed to Stevenson was not the type of "wages for work performed before termination" that gives rise to a Wage Payment Act claim. We shall vacate the judgment for that reason, and because the trial court should have let the jury decide whether Stevenson's severance benefit included her stock option earnings and should not have awarded Stevenson four times her unpaid wages.
FACTS AND LEGAL PROCEEDINGS
BB&T;merged with Maryland Federal Bancorp, Inc. in 1998. At the time, Stevenson was a Senior Vice President of branch operations with Maryland Federal. BB&T;offered Stevenson a position as Senior Vice President of the Maryland Region, with a three year written employment agreement beginning September 20, 1998.
Section 4 of the proposed agreement contained a non-compete clause. " n consideration of the mutual covenants" in the employment agreement, Stevenson was asked to promise that, "upon termination of employment," she would not "directly or indirectly, either as a principal, agent, employee, employer, stockholder, co-partner or in any other individual or representative capacity whatsoever," compete with BB&T; Specifically, Stevenson could not "engage in a Competitive [banking, financial services, insurance, mortgage, or trust] Business anywhere in the States of Maryland, Virginia, North Carolina, or South Carolina, or the District of Columbia, or any county contiguous to" those jurisdictions. She also would be barred from soliciting BB&T;customers and employees.
Just as when she worked for Maryland Federal, Stevenson's compensation was to include bank stock options. These options allowed her to purchase shares of bank common stock at a below-market price, then sell that stock for a profit at a higher market price, at a time she selected.
The employment contract also provided in Section 6 for "Termination Compensation" if either BB&T;or Stevenson terminated the contract before its term expired. The contract stated in pertinent part:
6c.
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