The partners at issue, most of whom were in their 50s or 60s, were demoted to counsel status in 1999 by the firm then known as Sidley & Austin. All but around 10 of them ultimately left the Chicago-based firm. In a January 2005 lawsuit filed after a lengthy investigation, the EEOC charged that the demotions were made in violation of the federal Age Discrimination in Employment Act. The firm claims the demotions were based on performance.
The case had drawn widespread attention to the issue of age at law firms, many of which continue to maintain mandatory retirement policies for partners. It also forcefully illustrated how the corporate-like management structures typical of today's large firms have altered the nature of partnership.
The EEOC had argued that Sidley partners were employees subject to anti-discrimination laws rather than employers, who are exempt, because they did not discuss or vote on management issues at the 1,700-lawyer firm and all major decisions, including partner compensation, were made by an unelected executive committee.
According to the consent decree signed late Thursday (4 October) by the parties and Judge James Zagel of the US District Court for the Northern District of Illinois, Sidley agreed that the affected partners were employees subject to the ADEA only "[f]or the purposes of resolution of this matter".
However, the decree does not constitute a finding on the merits of the case. Nor does it require the firm to admit any wrongdoing. Sidley said on Friday (5 October) the settlement was strictly a business decision.
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