A long-running dispute over a Salomon Smith Barney Capital Accumulation Plan (CAP) is going to trial.

On April 24, a New Jersey court will hear arguments that the plan — a deferred compensation program in which employees buy restricted shares of their employer's stock through payroll deductions — violates wage laws. The trial is significant for its goal: to strike down the plan altogether.

This case, brought by Andrew Brosnick, an attorney at Nagel Rice Dreifuss & Mazie, was first filed in October 1999 on behalf of former SSB brokers Melvin Rosen and James Fox. The suit now includes 170 plaintiffs in class action.

“This is really starting to hit close now,” says Bill Singer, former in-house counsel at SSB, who now represents broker/dealers and reps. (Singer also writes columns for Registered Rep.)

The CAP program has been under fire mainly from former employees who believe its terms place unlawful restrictions on access to money they earned. The plan works like this: wages are deducted from employee pay and placed into discounted but restricted company stock. After two years, the deductions turn into Citigroup common shares. But if an employee leaves the company before the conversion to common shares occurs, he forfeits the funds in the restricted shares.

Smith Barney views the plan as an employee retention tool; brokers and other employees feel the company is holding their pay hostage.

Complainants have been aiming at the CAP plan for years, but a break came in November, when an Illinois judge ruled the Smith Barney CAP violated state wage law. (Hearings on that case also are scheduled for April.)

A spokesperson for Salomon Smith Barney was unavailable for comment. In the past, the firm has been resolute in appealing judgments against its plan.