## Facts

- Sergey Aleynikov worked for Goldman, Sachs & Co. (a non-corporate subsidiary of The Goldman Sachs Group, Inc.) from 2007 to 2009 as a computer programmer with the title “vice president,” without managerial or supervisory duties.
- Before leaving for another employer, Aleynikov copied and transferred proprietary high-frequency trading source code developed at the subsidiary.
- He was federally indicted and convicted under the National Stolen Property Act and the Economic Espionage Act; the Second Circuit later reversed, holding his conduct did not fall within those federal statutes.
- A New York grand jury later indicted him on state charges based on the same conduct; that prosecution was pending during this appeal.
- The parent company’s by-laws provided indemnification and advancement of legal fees to certain persons, including “officers” of non-corporate subsidiaries who became parties to proceedings “by reason of” their status.
- The by-laws did not define “officer” by job title; they referred to an “officer” or a person “acting in a similar capacity or as a manager.”
- Aleynikov sought (1) indemnification for federal defense costs, (2) advancement for the New York defense, and (3) “fees on fees” incurred litigating entitlement to indemnification/advancement.
- The district court granted Aleynikov summary judgment on advancement, treated “vice president” as unambiguously within “officer,” denied summary judgment to either side on indemnification, and relied in part on construing any ambiguity against the drafter.

## Issues

1. Whether the term “officer” in the by-laws was ambiguous as applied to a non-managerial employee with the title “vice president.”
2. Whether summary judgment was proper on advancement (and on the parties’ cross-motions) given extrinsic evidence bearing on officer status.
3. Whether, under Delaware law, *contra proferentem* could be used at the summary-judgment stage to resolve the ambiguity in favor of Aleynikov.

## Decision

- The Third Circuit held “officer” was ambiguous as applied to Aleynikov and that extrinsic evidence created genuine disputes of material fact on whether he was an “officer” under the by-laws.
- The court vacated the grant of summary judgment awarding Aleynikov advancement.
- The court affirmed denial of the company’s cross-motion for summary judgment on both advancement and indemnification because the record did not resolve officer status as a matter of law.
- The court held *contra proferentem* could not be used at this stage to decide whether Aleynikov fell within the class protected by the by-laws.
- The case was remanded for further proceedings on officer status and any resulting entitlement to advancement, indemnification, and “fees on fees.”

## Legal Principles

- Under Delaware law, contractual language is ambiguous if it is reasonably susceptible to more than one interpretation; when ambiguity exists and extrinsic evidence is material, summary judgment is generally improper.
- Job titles in large organizations may not establish “officer” status where the governing instrument ties “officer” to authority or managerial function and corporate practice distinguishes formal officers from employees with inflated titles.
- In interpreting corporate by-laws, extrinsic evidence may include formal appointment procedures, internal officer lists, approval requirements, and historical indemnification/advancement practices.
- *Contra proferentem* is a limited interpretive tool and generally does not resolve, at the threshold, whether a claimant is within the protected class of a corporate instrument; it operates, if at all, only after other interpretive methods and relevant extrinsic evidence are exhausted.
- Advancement is interim payment subject to repayment if indemnification is unavailable; both advancement and indemnification may depend on the threshold question whether the claimant qualifies under the by-laws, and related “fees on fees” rise or fall with that entitlement.

## Conclusion

The Third Circuit required fact-finding on whether a non-managerial “vice president” qualified as an “officer” entitled to advancement and indemnification under the by-laws, vacating a summary-judgment award of advancement and rejecting use of *contra proferentem* to decide beneficiary status at that stage.


Aleynikov v. Goldman Sachs Grp., Inc., 765 F.3d 350 (3d Cir. 2014)