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Colagrossi v. UBS Securities, LLC

United States District Court, N.D. Illinois, Eastern Division

June 4, 2014



WILLIAM T. HART, District Judge.

Plaintiff Gerard Colagrossi asserts claims based on an alleged oral agreement and the Illinois Wage Payment and Collection Act. Defendant UBS Securities LLC ("UBS") moves for summary judgment, arguing that the oral agreement is barred by two later written employment agreements, both of which contained integration clauses barring reliance on any earlier oral or written agreements.

Plaintiff initiated this action by a suit filed in the Circuit Court of Cook County, Illinois. UBS removed the case to this court based on diversity jurisdiction. The court has jurisdiction of the subject matter and the parties. 28 U.S.C. ยง 1332.


In 2005, plaintiff Gerard Colagrossi was running the 24-hour futures trading desk at Man Financial, Inc. Plaintiff's team was responsible for generating, clearing, and executing futures trades. Although the trading desk primarily received orders for futures trades, it also sometimes received a different type of order known as an exchange futures for physical trade ("EFP trade"). Unlike the normal futures trades, the EFP trades were not directly executed by the 24-hour desk, but were instead sent to an EFP dealer for execution. Because the EFP trade orders related to foreign exchange futures, the EFP dealer had to be employed by a bank, and not a futures commission merchant.

Between the early 1990s and 2005, plaintiff hired, fired, and paid the employees as he saw fit. Plaintiff developed the 24-hour desk's client relationships. On occasion he used his own money to do so.

In 2005, plaintiff was approached by John Murphy, the head of ABN's North American Futures division, about the possibility of moving to ABN. They met several times to discuss compensation and other terms. All of the negotiations occurred prior to July 29, 2005. Murphy orally offered plaintiff a base salary and a 70/30 split on commissions from futures trades. Plaintiff claims - and defendant disputes - that Murphy also promised that plaintiff would receive a 50% split of profits from EFP trades referred by the 24-hour desk to ABN Bank. Plaintiff claims he viewed this promise as an important factor in deciding to take the job because the EFP profits were substantial.

Plaintiff told Murphy that, at Man, he hired and fired members of his desk and that he decided how to divide commissions among team members. Murphy testified that, although it was understood that plaintiff would have control over hiring, firing, and allocations of the 24-hour desk bonus pool, plaintiff's decisions would be subject to Murphy's approval.

Based on these discussions, plaintiff decided to move his desk to ABN, and he and the other team members started working for ABN during August 2005. On October 18, 2005, plaintiff signed a written employment agreement. Plaintiff reviewed the agreement before signing it. He "believes [that he] did have a lawyer check" the agreement before he signed it, although he said that the lawyer may have checked the later employment agreement with UBS. Either way, he is certain that "there was a lawyer involved somewhere." The ABN agreement addresses various employment issues and includes a provision for the payment of a base salary and a 70/30 split on futures commissions. It also contains an integration clause providing that any prior oral or written agreements or understandings are superseded.

Plaintiff received the base salary and 70% of futures profits as promised at ABN. He did not receive any of the profits of EFP trades that his desk had been generating. Plaintiff had conversations with Murphy complaining about the nonpayment, but Murphy (according to plaintiff) just kept giving him excuses. Murphy told him that he would do his best to make something happen, that he had discussions with a couple of individuals about trying to get payment, and that plaintiff should wait until everything was in place and that it would then all be sorted out.

In May 2006, UBS acquired ABN's futures division through a Stock and Asset Purchase Agreement. Plaintiff talked with Murphy, who would later become head of North American Futures at UBS, and Clark Hutchison, who was the managing director at UBS, about continuing his 24-hour desk with UBS. Plaintiff claims that he orally negotiated a deal with Hutchison and Murphy, which included salaries as well as a retention bonus for his desk members. He also claims that he told Hutchison that there was an agreement with ABN Bank that he would be paid 50% of the EFP profits and that plaintiff wanted this agreement to continue. Hutchison disputes this assertion. Plaintiff claims that Hutchison said that UBS would honor for one year whatever agreements he had in place with ABN futures.

In September 2006, plaintiff entered into a written employment agreement with UBS. The 10-page agreement provides, among other things, that plaintiff was to receive a base salary and a discretionary bonus, but it does not contain any provision about EFP profits. Like the ABN employment agreement, the UBS agreement contains an integration clause barring reliance on earlier oral agreements. Plaintiff negotiated several terms in the agreement. He was able to obtain UBS agreement to shorten the non-compete clause from 6 months to 30 days and to increase his retention bonus by $25, 000.

While at UBS, plaintiff was paid the compensation described in the agreement, but once again, he was not paid any EFP profits. Plaintiff states that he talked to Murphy and two others about the lack of payment. They told him they would look into the issue, but nothing was ever resolved.

In his first year at UBS, plaintiff was allowed to allocate the bonus pool money among the 24-hour desk employees. However, plaintiff's allocations were subject to approval of UBS supervisors. In August 2007, two desk employees (Wulffleff and Tye) transferred to another UBS division. Murphy told plaintiff to allocate some of the September pool money to them even though they did not work at the 24-hour desk that month. Murphy believed they introduced business to the desk, and he did not want plaintiff retaliating against them for moving to another UBS division. The amount Murphy asked to be allocated to them was consistent with what plaintiff had given ...

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