Schachter v. Citigroup, Inc., 159 Cal. App. 4th 10 (2008)

During his employment, David B. Schachter, a former securities salesperson for Salomon Smith Barney, participated in Smith Barney’s voluntary Capital Accumulation Plan, which allowed him to direct Smith Barney to pay him five percent of his total compensation in the form of restricted stock; the stock was purchased at a 25% discount below its then-current market price. Pursuant to the Plan, if the participating employee remained employed for two years from the time the shares issued, title to the shares fully vested with the employee. However, if the employee voluntarily terminated his or her employment or was terminated for cause during the two-year period, he or she forfeited the shares as well as the money that was used to purchase them. When Schachter later voluntarily terminated his employment, he forfeited the shares and filed suit, alleging the forfeiture violated Labor Code §§ 201 and 202 (requiring immediate payment of all wages due upon termination of employment). The trial court granted defendants’ motion for summary judgment, and the Court of Appeal affirmed, holding that Schachter was paid all the wages he was owed and that in any event the Plan’s forfeiture provisions are lawful. Cf. Noble v. Draper, 159 Cal. App. 4th 810 (2008) (fraud claims are not precluded by plaintiffs’ prior pursuit of wage claims before the Labor Commissioner).