Citigroup Wins Affirmances in Class Actions Over Compensation Program

Skadden represented Citigroup in obtaining an affirmance of a summary judgment dismissal of two class actions (also handled by Skadden) challenging the validity of the company’s “Capital Accumulation Program” (CAP). These were the last two cases in a series of more than 20 challenges to CAP, some in federal court, some in state court, all of which have now been favorably resolved. CAP, Citigroup's primary incentive compensation program, involves the award to employees of discounted stock that is forfeited if an employee resigns prior to the vesting date. The suits, which were on behalf of classes of former Citigroup employees in Colorado and Louisiana, alleged that CAP forfeiture violates those states’ common law and public policy; the Louisiana case also alleged violation of the state wage statute. On July 13, the U.S. Court of Appeals for the First Circuit affirmed the district court's "able and convincing opinion," agreeing with Judge Gertner's reasoning.