When UBS tried this year to head off a class action over compensation practices, the investment bank invoked the contracts that employees signed waiving rights to band together to pursue cases in court.

In March, U.S. District Judge Matthew Kennelly in Chicago allowed the case to proceed against UBS in court, citing a prior decision by the U.S. Court of Appeals for the Seventh Circuit. The appeals court said class action waivers were invalid under federal labor law.

That was before the U.S. Supreme Court stepped in.

On Wednesday, seizing on the Supreme Court's decision last term that said employment agreements can restrict class actions, UBS asked the Seventh Circuit to overrule Kennelly, block the class action and push the dispute to arbitration.

UBS, represented by Gibson, Dunn & Crutcher partner Eugene Scalia, argued the case's “tenure in the federal courts should be brought to [a] prompt conclusion” after the Supreme Court's decision in Epic Systems v. Lewis. In that 5-4 decision, the high court found that class action waivers are enforceable, overturning an earlier Seventh Circuit ruling.

“Post-Epic Systems, the district court's premise—that the waivers were invalid, and the parties could thus maintain class claims—is no longer correct,” Scalia said in his opening brief.

“To the extent that plaintiffs seek affirmance of the district court's decision on alternative grounds, their arguments may be dispensed with quickly—as plaintiffs evidently recognized when they initially told the lower court that if Lewis were reversed, this case belonged in arbitration,” he added.

Scalia declined to comment on the case Thursday.

Lawyers for UBS said the “plaintiffs have spent nearly two years in court seeking to avoid doing what they unequivocally agreed to do: arbitrate their claims against their former employer. In the process, they have made 'a mockery of arbitration's promise to expedite and cut the costs of resolving disputes.'”

The plaintiffs—Shannon Zoller, a former UBS investment banker, and Alexander Beigelman, a former information technologies executive at the bank, who were each terminated as part of what UBS called “reductions in force”—are represented by Linda Friedman of Stowell & Friedman, a Chicago-based boutique that specializes in employment litigation. Friedman could not be reached for comment Thursday.

Zoller and Beigelman based their claims, in part, on being denied discretionary bonuses in 2012 and 2014, respectively. Before bringing his case with Zoller in federal court, Beigelman initiated an arbitration proceeding in 2015 before the Financial Industry Regulatory Authority, where a panel denied his claims for severance and his 2014 bonus but ordered UBS to pay out some of his deferred compensation awards, according to court papers.

“The allegations in this case are false, and the Supreme Court decision earlier this year makes clear that this case does not belong in court at all,” a UBS spokesman said.

Beigelman also accused UBS of age discrimination and sought to represent former employees older than 40 who were terminated in reductions of force, denied compensation and required to sign a release of discrimination claims to receive a portion of their incentive and deferred compensation. Scalia, in his filing Wednesday, wrote that Beigelman pleaded “no supporting facts” in his allegation of age discrimination.

Zoller and Beigelman alleged UBS engages in a scheme of promising employees yearly bonuses but firing many of them before any bonus accrues. And in severance agreements, the plaintiffs alleged, UBS effectively “holds hostage” employees' deferred compensation unless they waive claims to incentive-based pay, along with any future discrimination claims against the bank.

Faced with “this Hobson's choice, many employees—exactly as UBS intended—purport to release their compensation and discrimination claims in order to recover at least a portion of the money they are owed,” Friedman wrote in a 2017 court filing.

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