The Equal Employment Opportunity Commission ("EEOC") has filed suit in the Northern District of Illinois against one of the country's biggest and most well-known law firms, Sidley, Austin, Brown & Wood ("Sidley Austin"). The EEOC alleges that the law firm, which maintains an age-based retirement policy, discriminated against its own partners by engaging in a campaign of illegal age discrimination. The lawsuit seeks reinstatement of the partners, injunctive relief, and monetary damages that could exceed over $30 million.
Specifically, the EEOC alleges that the firm's practice of setting a mandatory retirement age violates the Age Discrimination In Employment Act. The suit also contends that Sidley Austin illegally targeted partners 40 years of age and older for expulsion from the partnership due to their age. Ordinarily, partners are not afforded protection by federal and state anti-discrimination laws, which typically apply only to employees. The EEOC, however, contends a significant number of partnersat Sidley Austin were nothing more than employees due to their minimal role in managing the firm.
Other courts that have looked at this issue have usually refused to afford partners the same protection afforded toemployees. Recently, the 7th Circuit Court of Appeals in Illinois held that a former law firm partner could not sue his firm for retaliation under Title VII of the Civil Rights Act. In Solon v. Kaplan, the firm's former managing partner alleged that his law firm retaliated against him after he spoke out against a partner's alleged sexual harassment of two of the firm's secretaries. The Court held that Solon was not an "employee" entitled to protection under Title VII and dismissed his lawsuit.
In making the decision that Solon was not an employee entitled to protection under Title VII, the Court analyzed a six factor "employee" test cited by the United States Supreme Court in a case filed under the Americans With Disabilities Act, Clackamas Gastroenterology Association v. Wells, (See "US Supreme Court Clarifies ADA's Description of ‘Employee," Thompson Coe Labor & Employment News, Vol. 4, Issue 1):
- Whether the organization can hire or fire the individual or set the rules and regulations of the individual's work;
- Whether and to what extent the organization supervises the individual's work;
- Whether the individual reports to someone higher in the organization;
- Whether and to what extent the individual is able to influence the organization;
- Whether the parties intended for the individual to be an employee, as expressed in written agreements and contracts; and
- Whether the individual shared in the profits, losses and liabilities of the organization.
The Court held that "no reasonable juror could find that Solon was an employee of the firm" and refused to allow his lawsuit to proceed.The Courtfurther noted that whether a partner or shareholderisan "employee" entitled to protection under the anti-discrimination laws depends on the totality of the situationand that no one factor isdeterminative. Because Solon had a great deal of influence over the operation of the lawfirm, shared in the firm's profits, and, among other things, had unilateral veto power over the admission of new attorneys, the Court refused to afford him protection as an "employee."
Professional partnerships throughout the country will be eagerly waiting to see the impact of the latest lawsuit on this classification.