Foley v. American Electric Power (contract dispute)
U.S. District Court, Southern District of Ohio, Eastern Division
Palmer produced evidence that gas trader was owed his bonus since his superiors knew or should have known of his alleged illegal activities.
Joe Foley was a natural gas trader for American Electric Power Company. In June 2002, Foley was to receive bonus money from a Phantom Equity Plan in which he and other traders participated. AEP claimed that Foley’s conduct in reporting trades made him a “faithless servant”, which precluded him from receiving this bonus money. But, Foley’s conduct was consistent with how the gas trading industry was operated at the time, which FERC determined on an industry wide basis did not definitively skew the market. Foley was carrying out his duties as he understood he was supposed to do, including misreporting certain trades just as more than twenty other energy companies were doing. AEP management claimed it did not know this was how things were being done. AEP had no policies or procedures in effect that related to the reporting of such information. AEP gave Foley no training or guidance in spite of the fact that Foley’s prior experience was that of a grain trader, not a gas trader. Foley never hid what was being done from his superiors, but was fired along with several other involved traders by AEP. The case proceeded to a bench trial before Judge Algenon Marbley. After several days of trial, the matter was settled for a confidential amount.