The claim was launched by the US Equal Employment Opportunity Commission (EEOC) in 2002 on behalf of 32 former partners at the firm, who were demoted to counsel status in 1999 by the legacy Chicago practice Sidley & Austin.
The EEOC said the demotions were made in violation of the Age Discrimination in Employment Act, but the firm claimed the demotions were based on performance.
Crucially, Sidley also argued that anti-discrimination laws did not apply to partners, because they were owners rather than employees.
The EEOC argued the group could not be classed as owners as most key decisions at the firm were made by an un-elected executive committee.
The consent decree, which means that Sidley avoided an admission of guilt, was signed by the parties and Judge James Zagel of the District Court of the Northern District of Illinois last week. The agreement also saw Sidley agree that the partners were employers “only for the resolution of this matter”.
Sidley issued a statement: “The firm believes that settling this case is preferable to the cost and uncertainties of continued litigation.”
The EEOC’s success in pursuing the case promises to heat up the current debate over the tactics of
Even though
As such, the
Proskauer Rose employment partner Bettina Plevan (pictured) told Legal Week: “It is a subject that is being debated by a lot of top firms. The settlement will not set a precedent because there are so many differences in the remuneration, governance and tenure at large law firms — but it is clear where the EEOC stands.”
She added: “Firms are reconsidering it not so much on a legal basis, but as a governance and philosophical issue.”
See law.com for more on the story.
