Supreme Court To Review Stock Forfeiture Case

The Supreme Court has granted a petition for review in Schachter v. Citigroup, Inc. (2008) 159 Cal.App.4th 10, which (temporarily) upheld the validity of a stock forfeiture plan in which participating employees who resign or are terminated for cause within a two-year vesting period forfeits the stock as well as the wages used to purchase it. We previously discussed the case in a post you can read at this link.

We've read it, but we find the twisted reasoning in section three of the opinion ("Enforcement of the Plan’s Forfeiture Provisions Does Not Violate Sections 201 or 202") to be a little Kafkaesque. Read it yourself and tell us if you disagree. You can download the full text of Schachter v. Citigroup. Inc. here in pdf or word format. One thing is for sure, the Supreme Court is taking a little extra time to consider this one. The High Court has extended its time to grant or deny review in the case to May 27, 2008.

Perhaps we weren't the only ones who saw too much of Kafka in that opinion. We would be very surprised to see the ruling upheld.