                              In the

    United States Court of Appeals
                For the Seventh Circuit
                    ____________________


No. 16-3336
NICHOLAS WEBB and THAD BEVERSDORF,
                                               Plaintiffs-Appellants,

                                v.

MICHAEL FRAWLEY,
                                                Defendant-Appellee.
                    ____________________

        Appeal from the United States District Court for the
          Northern District of Illinois, Eastern Division.
         No. 15 C 6406 — Samuel Der-Yeghiayan, Judge.
                    ____________________

      ARGUED APRIL 19, 2017 — DECIDED MAY 24, 2017
                ____________________

   Before BAUER, POSNER, and HAMILTON, Circuit Judges.
   POSNER, Circuit Judge. Jefferies LLC, a securities and in-
vestment-banking firm, in 2012 hired Michael Frawley to be
the firm’s vice chairman and global head of metals and listed
products. Nicholas Webb, a sales executive in the global
metals group headed by Frawley of a firm they had previ-
ously worked for, and Thad Beversdorf, a director of that
group, were hired by Jefferies on the same day that Frawley
2                                                 No. 16-3336


was hired. Webb and Beversdorf signed employment con-
tracts with Jefferies in which they “consent[ed] that any arbi-
tration proceeding brought with respect to matters related to
your employment or this Agreement shall be brought before
FINRA … or if the parties are permitted to bring such action
in a state or federal court, then you hereby consent to the
personal jurisdiction of the state and federal courts … [in
New York City] with respect to matters related to your em-
ployment or this Agreement.”
    FINRA is an acronym for Financial Industry Regulatory
Authority, Inc., a “not-for-profit organization authorized by
Congress to protect America’s investors by making sure the
broker-dealer industry operates fairly and honestly ... [by]
writing and enforcing rules governing the activities of
3,800 broker-dealers with 633,800 brokers; examining firms
for compliance with those rules; fostering market transpar-
ency; and educating investors.” FINRA, “About FINRA,”
www.finra.org/about (visited May 23, 2017).
     All three of Jefferies’ new employees were metals traders,
primarily in iron ore. But in 2013 Jefferies decided to get out
of the iron ore business, and so ordered Frawley to tell Webb
and Beversdorf to stop trading iron ore. Frawley did not tell
them, and instead pushed them to do more iron ore trades.
Some months later, Jefferies fired Webb and Beversdorf; the
record does not indicate whether Frawley was fired, alt-
hough it’s clear that he no longer is employed by Jefferies.
Webb and Beversdorf brought this suit against Frawley in an
Illinois state court in 2015, charging him with having de-
frauded them and interfered with their contracts with Jeffer-
ies—in short with having cost them their jobs. Frawley
sought to remove the case to federal court on the ground
No. 16-3336                                                    3


that the plaintiffs were citizens of a different state (Illinois)
from the defendant (New York) and that “the amount in
controversy exceeds $75,000, exclusive of interest and costs.”
Frawley’s notice of removal noted that “Plaintiffs Webb and
Beversdorf each seek damages in excess of $100,000 against
Defendant, or an amount in excess of $50,000 for each count
of their two-count Complaint.” The following day Frawley
moved the district court to compel Webb and Beversdorf to
arbitrate their dispute with him before FINRA; he also asked
the district court to stay the litigation pending the arbitra-
tion.
    Webb and Beversdorf responded by filing a motion to
remand the case to the state court on the ground that Fraw-
ley had failed to establish that the amount in controversy ex-
ceeded $75,000 (as required for a suit based on diversity of
citizenship, see 28 U.S.C. § 1332(a)) because the $100,000 fig-
ure had been arrived at by aggregation of duplicative
claims—the two counts in their complaints had been nothing
more than different theories under which the plaintiffs could
recover the single $50,000 loss that each had suffered; there-
fore Frawley had double-counted. The district judge denied
the motion to remand the case to the state court, and shortly
afterward Frawley renewed his motion (on which the judge
had not ruled) to compel the plaintiffs to arbitrate their dis-
pute with him. Webb and Beversdorf submitted affidavits
which stated that they’d never agreed to arbitrate disputes
with Frawley and after being fired by Jefferies had not been
associated with any member of FINRA. But the judge grant-
ed Frawley’s motion to compel arbitration, and having done
so dismissed the plaintiffs’ suit (the suit by Webb and Bev-
ersdorf that had originally been brought in state court, later
removed to federal court), precipitating their appeal to us.
4                                                  No. 16-3336


    The judge was correct not to remand the case to state
court, but instead retain it in the federal district court, if
Webb and Beversdorf were each seeking more than $75,000
in damages from Frawley, for if they were he was entitled to
have removed the case to the federal court. Our best guess—
though no stronger statement is possible—is that they were
seeking higher damages. They had received high annual sal-
aries at Jefferies—about $175,000 for Webb and $250,000 for
Beversdorf, each with the potential to earn additional bo-
nuses. They are unlikely to have obtained comparable sala-
ries elsewhere, for they complain in their complaint that
Frawley’s actions had “resulted in their [Webb’s and Bev-
ersdorf’s] commercial reputations being irreparably dam-
aged in the industry.” That assertion has led Frawley to as-
sert that the stakes of the case exceed $75,000 for each of the
two plaintiffs, and we have said that a defendant’s “estimate
of the stakes is acceptable if it is plausible and supported by
a preponderance of the evidence.” Oshana v. Coca-Cola Co.,
472 F.3d 506, 511 (7th Cir. 2006). Had Webb and Beversdorf
wanted to remain in state court, they could have stipulated
that they would collect no more than $75,000 in damages
each. They did not.
    The district court allowed limited discovery on the
amount in controversy, and Frawley sent each plaintiff a re-
quest to admit that the damages he suffered had not exceed-
ed $75,000. Each plaintiff had replied that he could not
“truthfully admit or deny this request.” As we said in Work-
man v. United Parcel Service, Inc., 234 F.3d 998, 1000 (7th Cir.
2000), “if [the plaintiff] doesn’t make such a stipulation, the
inference arises that he thinks his claim may be worth
more.”
No. 16-3336                                                   5


    As for Frawley’s motion to compel the plaintiffs to arbi-
trate, it is based on FINRA Rule 13200(a), which states that
“except as otherwise provided in the Code [FINRA’s code of
arbitration procedure], a dispute must be arbitrated under
the Code if the dispute arises out of the business activities of
a member or an associated person and is between or among
Members; Members and Associated Persons; or Associated
Persons.” Frawley argues that Webb and Beversdorf were
persons associated with a FINRA member, namely Jefferies,
even though they had ceased to work for Jefferies. FINRA
Rule 13100(u) defines a person associated with a member to
include “a person formerly associated with a member.” But
since FINRA is a private organization, the court could not
order Webb and Beversdorf to follow its arbitration rules un-
less they’d agreed to do so. See Howsam v. Dean Witter Reyn-
olds, Inc., 537 U.S. 79, 83 (2002). Beversdorf agreed; he signed
a U-4 form, and, as explained in subsection (1) of an accom-
panying disclosure, “[by signing] you are agreeing to arbi-
trate any dispute, claim or controversy that may arise be-
tween you and your firm, or a customer, or any other per-
son[,] that is required to be arbitrated under the rules of the
self-regulatory organizations [including FINRA] with which
you are registering. This means you are giving up the right
to sue a member, customer, or another associated person in
court, including the right to a trial by jury, except as provid-
ed by the rules of the arbitration forum in which a claim is
filed.” Webb, however, signed neither a U-4 form nor any
other agreement requiring him to arbitrate before FINRA.
Frawley points to the arbitration provision in Webb’s em-
ployment contract with Jefferies, quoted earlier in the opin-
ion, but that’s just a venue provision—it simply requires that
if Webb agrees to arbitrate his dispute with Frawley, he
6                                               No. 16-3336


must arbitrate it before FINRA. Having not so agreed he re-
mains free to litigate his dispute with Frawley in federal
court.
    We therefore affirm in part and reverse in part the dis-
trict court’s order compelling arbitration: Beversdorf must
arbitrate his dispute with Frawley pursuant to the form U-4,
while Webb’s suit against Frawley may proceed in the dis-
trict court.
                                                So ordered.
