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Age Prejudice Case To Cost Firm Millions

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By HENRY WEINSTEIN, Los Angeles Times

Published: October 6, 2007

One of the nation's largest law firms has agreed to pay a $27.5 million to 32 former partners to settle a ground-breaking age discrimination case, the Equal Employment Opportunity Commission announced Friday.

The EEOC brought the case against Sidley Austin, which has more than 1,700 lawyers in 16 cities, after the firm in 1999 downgraded the lawyers' status and told them they would have to leave the firm because of their age.

The case had been watched closely because of a widely held belief in the legal profession that firm partners are employers and therefore not covered by federal anti-discrimination laws.

The EEOC, in a lawsuit filed in 2005, contended that the cashiered lawyers were partners in name only because they had no voice in the firm's management, including hiring, firing and salary decisions. Consequently, the lawyers were employees entitled to protections of the Age Discrimination in Employment Act, the suit contended.

The firm vigorously defended the case, but lost key preliminary rounds in U.S. District Court in Chicago and at the 7th U.S. Circuit Court of Appeals. The Supreme Court declined to review the decisions. Eventually, the Chicago-based firm decided to settle by agreeing to a consent decree, without admitting wrongdoing.

But in a consent decree approved by U.S. District Judge James B. Zagel in Chicago on Thursday, Sidley Austin made a significant concession, agreeing 'that each person for whom the EEOC has sought relief in this matter was an employee within the meaning of' the Age Discrimination in Employment Act.

The firm also is barred from firing or retiring a partner because of age, and from setting a mandatory retirement age for partners.

John Hendrickson, the EEOC's regional attorney in Chicago, said he thought the case set an important benchmark.

'Up to now, with no particularly good reason that I can discern, people in control of law firms said that if they called someone a partner ... they didn't need to worry about federal employment discrimination laws,' he said.

He said the case ensured 'the protection of professionals from discriminatory employment actions, ' and ratified the authority of the EEOC, he said, 'to investigate and obtain relief for victims of age discrimination on its own initiative.'

Duke University law professor Catherine Fisk said the resolution made sense.

'Anyone who is in a position where they can be forced out because of age should be considered an employee,' said Fisk, an employment law specialist.

New York University law professor Stephen Gillers said the settlement is a confirmation of changes in the legal profession in the past 25 years. 'We have seen the creeping bureaucratization of large law firms. Slowly but surely, they act less like organizations of professionals and more like traditional businesses with a product to sell,' he said.

Ronald S. Cooper, the EEOC's general counsel in Washington, emphasized the broader ramifications of the settlement.

'The demographic changes in America assure that we will see more opportunities for age discrimination to occur. Therefore it is increasingly important that all employers understand the impact of the Age Discrimination in Employment Act on their operations and that we re-emphasize its important protection for older workers,' he said.

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