Mazer v. Safeway, Inc., No. CIV.A. AW-03-3650.

• Decision Date: 27 October 2005
• Docket Number: No. CIV.A. AW-03-3650.
• Parties: Timothy MAZER, Plaintiff, v. SAFEWAY, INC., Defendant.
• Court: U.S. District Court — District of Maryland

398 F.Supp.2d 412

Timothy MAZER, Plaintiff, v. SAFEWAY, INC., Defendant.

No. CIV.A. AW-03-3650.

United States District Court, D. Maryland, Southern Division.

October 27, 2005.

COPYRIGHT MATERIAL OMITTED

James L. Mayer, Law Office of James L. Mayer, Columbia, MD, for Plaintiff.

Joseph P. Harkins, Maria Perugini Baechli, Littler Mendelson PC, Washington, DC, for Defendant.

MEMORANDUM OPINION

WILLIAMS, District Judge.

Plaintiff Timothy Mazer ("Plaintiff" or "Mazer") has brought this suit against Safeway, Inc. ("Safeway" or "Defendant"), alleging that Safeway failed to pay Mazer compensation and benefits in violation of the Employment Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001-1461 (2005), and Maryland law. Currently pending before the Court is Defendant's Motion for Partial Summary Judgment [37]. The Court has reviewed the entire record, as well as the Pleadings, with respect to the instant motion. No hearing is deemed necessary. See Local Rule 105.6 (D.Md.2004). For the reasons stated below, the Court will GRANT in part and DENY in part Defendant's Motion for Summary Judgment.

FACTUAL & PROCEDURAL BACKGROUND

The following facts are taken in the light most favorable to the non-movant. Mazer was an employee at Safeway who has held several management positions. In 1996, Mazer became Safeway's Director of Pricing for the Eastern Division.

Safeway's Centralization and Layoffs

Sometime around late 2001 or early 2002, Safeway initiated a plan to centralize jobs, duties, and responsibilities to its corporate headquarters in California. To announce certain layoffs, Roger Herding ("Herding"), the Vice President of Marketing, and Donna Gwin ("Gwin"), the Director of Human Resources for the Eastern Division held a meeting with the employees that would be terminated. At that meeting, Mazer learned that Safeway planned to eliminate Mazer's job as Pricing Director for the Eastern Division as part of this reorganization. Herding initially told Mazer that he would be laid off on July 5, 2002.

Herding and Gwin explained to the employees at this meeting what benefits and severance might be available to them. Although employees had to work through the initial layoff date to be eligible for any severance payments, the employees that left Safeway after that date would be eligible for severance pay as long as they gave Safeway two weeks notice. Herding and Gwin emphasized to these employees, however, that they would not be eligible for severance pay if Safeway terminated their employment for an involuntary reason. Herding and Gwin also distributed written materials summarizing this policy as well as the answer to questions related to benefits and severance to the discharged employees.

As Mazer's July 5, 2002 layoff date drew near, Herding asked Mazer to continue his employment at Safeway until August 9, 2002. With the second layoff date approaching, Herding requested once again that Mazer continue his employment at Safeway. Mazer agreed to remain in his position as Safeway's Director of Pricing for the Eastern Division until January 3, 2003.

At some point after Mazer learned that Safeway planned to eliminate his position, he asked Gwin whether he would be eligible for the 2002 bonus. To receive a bonus, an employee had to hold a "bonus eligible" position¹ on November 1, 2002. Gwin testified that she told Mazer that "he would have to give two weeks' [sic] notice. And that if he [gave]... notice that he would be entitled to his bonus, any bonus that was earned .... [I]f there was any bonus earned, that he would be entitled to it." Gwin Depo. at 38.

Mazer's Termination

Realizing that his employment at Safeway would soon come to an end, Mazer began searching for other employment. Mazer applied for a pricing supervisor position at Safeway's competitor, Giant Food, Inc. ("Giant"). Mazer interviewed with Giant in November 2002, and in December 2002, Giant offered Mazer the position of Pricing Supervisor. Mazer accepted the position at Giant and prepared to leave his employer, Safeway. Mazer submitted a letter of resignation to Safeway on December 19, 2002, giving two weeks notice. Mazer's supervisors, however, decided that he should not work the two weeks from December 19, 2002 to January 2, 2002. At Safeway's request, Mazer gathered his personal items and left the Safeway building with an escort on the afternoon of December 19, 2002.

The day after Mazer tendered his resignation, Safeway began an investigation of Mazer's use of pricing information. Safeway's computer system had filters in place that would identify files sent over the network that could contain potential pornographic or offensive material. Apparently, one of these filters stopped email sent by Mazer, which contained confidential pricing information. Mazer acknowledges that he attempted to email pricing information to his home computer on December 18, 2002. Mazer admits that he copied and attempted to send a list of approximately 1,100 items sold by Safeway. This list also included information related to each item's cost, retail price, gross profit and sensitivity code. Because of the size of this file, Mazer had difficulty sending this data by email. Eventually, he copied the information onto a disk. Copying or sending email with company files to a home computer, Mazer contends, was common practice among Safeway management. Mazer also states that he needed this information to perform his normal duties, which included identifying, investigating and correcting erroneous entries on this price listing database.

On Monday, December 23, 2002, Mazer met with Safeway's Eastern Division Security Director, Tom Harris, as well as Herding and Gwin. At this meeting, Harris questioned Mazer about his computer activities. In particular, Harris and Mazer discussed his treatment of the company's confidential pricing information. Harris asked Mazer if he could go to Mazer's house to retrieve any confidential pricing information there. Mazer agreed. When they reached the home, Mazer gave Harris diskettes and Mazer's planner. Harris asked to enter the house to search Mazer's personal computer, but Mazer responded that he had relatives in town and requested that Harris come back at another more convenient time.

Several days after this incident, Harris once again contacted Mazer. Harris inquired whether Mazer had any additional confidential Safeway information. In response, Mazer stated that he had collected other items and would return these items to Safeway. That day, December 27, 2002, Mazer met Harris in the Eastern Division parking lot and returned additional tapes, disks, and a CD-ROM containing Safeway's business strategy in a competitive market. At the parking lot meeting, Harris gave Mazer two letters. The first letter stated that Safeway had terminated Mazer's employment, effective December 23, 2002, for cause. The second letter alleged that Mazer misappropriated confidential company information. Specifically, this letter stated:

Based on investigation ... we believe that, prior to the termination of your employment with Safeway, you accessed and downloaded... Safeway's pricing database and related or derived pricing reports, including price sensitivity indicators, and other Confidential Information.

. . . . .

Your actions in misappropriating confidential information are unlawful and actionable, and directly violate the Maryland Uniform Trade Secrets Act and your Duty of Loyalty to the Company ...[T]o protect Safeway's Confidential Information, despite your unlawful actions, you must agree to permit an IT professional of Safeway's choice to access your home computer(s) and personal email account(s) to verify that all Confidential Information is permanently removed and that no Confidential Information has been transferred to any other location.

Safeway sent a carbon copy of the letter to the Executive Vice President of Giant, Mazer's future employer.

On December 27, 2002, the day Mazer received this letter, Mazer attempted to exercise stock options that Safeway had granted him during the course of his employment. Safeway had Mazer's stock options on hold, so Mazer was unable to sell these shares. Ultimately, Safeway refused to allow Mazer to exercise any previously granted stock options.

Shortly after Giant received this correspondence from Safeway, Giant officials met with Mazer to discuss the allegations in the letter. Mazer's supervisors at Giant, as well as internal and external counsel to Giant, attended this meeting. Mazer recalls that during the meeting, Giant's counsel discussed what types of knowledge Mazer "was able to use ... and what types of knowledge [he] was not allowed to use" as an employee of Giant.

On November 10, 2003, Mazer instituted this action against Safeway in the Circuit Court of Maryland for Prince George's County. On December 24, 2003, Safeway filed a Notice of Removal, pursuant to 28 U.S.C. §§ 1441 and 1446. Mazer's Amended Complaint contains seven counts. Count I is a state statutory claim for his base salary, sick pay, severance pay, stock options and bonus eligibility. Count II and III are ERISA claims. Count IV is a claim for breach of the Stock Option Agreement between Plaintiff and Safeway. Count V is also a breach of contract claim and alleges that Safeway breached an employment contract between Plaintiff and Safeway. Finally, Count VI and VII relate to the Safeway's communications with Giant. Count VI is a claim for defamation, and Count VII is an invasion of privacy claim.

Safeway moved for partial summary judgment on May 24, 2005 on Count I on the base salary, stock option, bonus pay, and severance pay claims. Safeway also moved for summary Judgment on all remaining counts. This motion is ripe and ready for disposition. The Court now will rule on this motion.

STANDARD OF REVIEW

Summary judgment is only appropriate if there are no genuine issues of material fact and the moving party is entitled to...