Jottings By An Employer's Lawyer

Tuesday, January 18, 2005

Discriminating Against Your Partner? - Sidley & Austin Sued By EEOC

Although I am not sure that many in the world outside big law firms are concerned, you can be sure there is keen interest among the large law firms, and probably their partners/shareholders, over a suit filed last week against Chicago based Sidley & Austin by the EEOC. (Although be sure and check out fellow blogger, Carolyn Elefant's thoughtful comments over at My Shingle, Big Firm Partners: Not Much More Than Small Time Employees.)

The Commission press release has the details from its viewpoint, EEOC Charges Sidley & Austin With Age Discrimination. The basic legal question is simple -- when does a partner ( and probably equity shareholder, in firms that are professional corporations) have so little say in the running of the firm, that they are for purposes of the discrimination laws just another employee.

In an earlier decision, partially enforcing an EEOC subpoena which preceded the filing of last week's complaint, Judge Posner lays out the arguments and issues in EEOC v. Sidley Austin Brown & Wood, 315 F.3d 696 (7th Cir. 2002). Although clearly only deciding a preliminary issue, it is hard to read the opinion without coming to the conclusion that Sidley & Austin may have an uphill battle on the initial legal question. Of course overcoming the hurdle of the partnership is only the first step.

The second step to ulimate liability would be determining if actions were taken against "partners" because they were over 40. Although brought on behalf of "31 partners" who were impacted by actions in 1999, according to today's story ($ subscription) in the National Law Journal the original complaint came from a 'confidential government informer from within Sidley.' The article also identifies one of the affected partners as David Alan Richards, now co-managing partner of the New York office of McCarter & English.

The second part of the issue, a fight over partners' performance would be at best a messy one, and allow a look into the privacy of the firm that I am sure many would prefer not happen. This all may be a mountain out of a molehill as I would think not that many lawyers are going to want to wade into this thicket. On the other hand when six figure incomes are at stake, one should never underestimate the wave of litigation that could be forthcoming should the gates be thrown open.

Not bad.
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