Wells Fargo Advisors is facing allegations that a deferred-compensation plan it offers to employees violates state laws.

Late last month, a lawsuit seeking class-action status was filed against the firm in the U.S. District Court for the Southern District of Texas, alleging that forfeiture provisions in its Performance Award Contribution and Deferral Plan are too broad and ill-defined.

The plan is offered to management and other highly paid employees, including financial advisors.

The lawsuit claims that the plan’s forfeiture clause violates Texas commercial law.

A “financial advisor forfeits his rightfully earned deferred compensation if he becomes ‘associated’ (not even employed) with ‘any financial services businesses’ (which is not defined anywhere in the Plan), anywhere in the world, and irrespective of whether that financial advisor actually competes [with Wells Fargo] in his or her new employment, for a period of three years,” the claim says.

The plan does not have the “reasonable limitations that Texas law would require” in a non-compete contract, said David Siegel, a lawyer at Ajamie LLP in Houston, who represents the plaintiffs.

“It’s debatable if three years is valid under Texas law, and it’s certainly not valid [with] no geographical limitation,” he said.

In May, Wells Fargo settled a similar case covering advisors in the states of California and North Dakota. Under terms of that settlement, the firm paid out a total of $5.1 million to 133 advisors, according to court documents.

Siegel said it’s unclear whether Wells Fargo intended for the pay plan at issue to operate as a non-compete contract.

The two named plaintiffs in the Texas suit are both former A.G. Edwards brokers, Roger Connell and Richard Ashcroft. Connell left Wells Fargo in March 2014 and is now affiliated with Commonwealth Financial Network in Abilene, Texas. Ashcroft joined Robert W. Baird & Co. in Houston after leaving Wells Fargo in July 2013.

A.G. Edwards was acquired by Wachovia Corp. in 2007. A year later, Wells Fargo bought Wachovia.

Connell forfeited $180,000 after leaving Wells Fargo, and Ashcroft $600,000, the suit says.

Siegel says the amounts the two brokers accumulated were involuntarily deferred from their paychecks.

The new suit estimates that there are more than 100 advisors in Texas who have had their deferred pay “seized” by Wells Fargo.

“Wells Fargo disputes the allegations and intends to defend the suit,” said Wells Fargo spokesman Tony Mattera in an e-mail.