By Jonathan Stempel
(Reuters) – A federal judge on Thursday dismissed a lawsuit accusing Credit Suisse (SIX:CSGN) Group AG of withholding up to $300 million of compensation from U.S.-based brokers when it closed their private banking unit in 2015.
U.S. District Judge William Orrick in San Francisco ruled that the plaintiff Christopher Laver was bound by an agreement to arbitrate employment-related disputes, and could not pursue his proposed class action on behalf of roughly 200 brokers.
The judge also said any arbitration details should be worked out in New York, where Credit Suisse thought the case belonged.
A lawyer for Laver did not immediately respond to requests for comment. Credit Suisse said it was pleased with the decision.
Laver had sued on behalf of brokers who refused or claimed they were unable to move to Wells Fargo (NYSE:WFC) & Co, which was given exclusive recruiting rights when Credit Suisse shut the 275-broker private banking unit.
He said Credit Suisse’s decision to enter a “recruiting agreement” with Wells Fargo, rather than formally sell the unit and trigger payouts, enabled the Swiss bank to stiff brokers by claiming they had all voluntarily resigned.
Credit Suisse has said it was standard industry practice for brokerages such as Wells Fargo to pay the deferred compensation at issue to new hires.
“Plaintiffs cannot be paid the same money twice,” Credit Suisse spokeswoman Karina Byrne said.
Laver, who lived near San Francisco, joined UBS AG after ending his 13-year stint at Credit Suisse. He has worked in financial services since 1981.
Wells Fargo was not a defendant and was not accused of wrongdoing.
The case is Laver v Credit Suisse Securities (USA) LLC, U.S. District Court, Northern District of California, No. 18-00828.