A Participant Lawsuit Against Employer Crosses State Lines

0, (PLANSPONSOR.com) --

 December 29, 2011 (PLANSPONSOR.com) - An employee sued her former employer, alleging it had failed to pay her for unvested shares earned through the company's profit sharing plan.

Hillary Kunda sued her former employer, C.R. Bard, Inc., alleging that the company violated Maryland law when at the time of her termination, it failed to pay her for unvested shares earned through the company's profit sharing plan. She argued that despite a New Jersey choice-of-law provision in the plan agreement, Maryland law applies to the contract because the Maryland Wage Payment and Collection Law (MWPCL) constitutes a fundamental Maryland public policy.

The district court granted Bard's motion to dismiss for failure to state a claim on which relief may be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). The court found that New Jersey law applies to the contract because the MWPCL is not a fundamental public policy of Maryland and that the unvested shares are not wages under New Jersey law. Furthermore, the court held that even if Maryland law applied, the unvested shares are not wages under the MWPCL and thus were never owed to Kunda.  The United States Court of Appeals for the Fourth Circuit affirmed the district court's decision.

Bard, a New Jersey corporation, hired Kunda, a Maryland resident, as a sales representative in 2001. When hired, Kunda's compensation included a $1,500 semi-monthly salary, commissions, and other fringe benefits.

In 2003, Bard implemented the "Bard Optimum Program," an "equity based long-term incentive program for top performing sales representatives," in order to recruit and retain top talent by offering an "opportunity to defer bonus and commission awards on a pre-tax basis." The plan contained a New Jersey choice-of-law provision.