Plaintiff David Balch entered into a contract with Oracle Corp. to close a large government contract known as the “Mega Deal.” After closing the Mega Deal, Balch received a bonus that was less than he believed he was owed. Pursuant to the contract, Balch initiated an arbitration proceeding against Oracle to resolve the dispute. The arbitrator issued an award in favor of Oracle.
Balch filed a petition to vacate the award in a Maryland state court. Oracle removed to the U.S. District Court for the District of Maryland and filed a motion to confirm the award. The district court explained that an award can only be vacated on four narrow grounds set out in 9 U.S.C. § 10. Section 10 allows for vacating an award (1) where the award was procured by corruption, fraud, or undue means; (2) where there was evident partiality or misconduct on the part of the arbitrator; or (3) where the arbitrator exceeded his or her powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made. In addition, a court may overturn a legal interpretation of an arbitrator if it is “in manifest disregard of the law.”
The court ruled in favor of Oracle and confirmed the award. The court reasoned that the arbitrator did not fail to follow the essence of the contract. The court further explained that the arbitrator “had full discretion to determine the case on summary judgment … and the arbitrator otherwise afforded Mr. Balch a full and fair hearing through extensive briefing and discovery.” Lastly, the court held that the arbitrator did not act in manifest disregard of the law because the arbitrator identified the controlling principles of the Maryland Wage Payment and Collection Law, reasonably determined that an ambiguity existed in the application of the law to apposite cases, and heeded the legal principles laid out in the cases he perceived to be correct and on point.
Balch v. Oracle Corp., No. 1:19-cv-01353 (D. Md. Nov. 15, 2019).