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Law Firm Discrimination Case Raises the Question: Can Partners Be Employees?
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Summary: Gender discrimination cases filed by law firm partners have sparked the debate on whether or not they are employees or business owners. 

An anonymous female partner is suing Proskauer for $50 million, but the law firm is arguing that as a partner, she is not an employee and therefore cannot sue. The case is one of several against law firms that accuse them of treating females differently in the workplace.

  
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This week, Proskauer asked a judge to throw out the sex bias case. According to Reuters, the firm’s motion for summary judgment said that “Jane Doe” cannot sue the firm under federal and state anti-discrimination laws because those laws are made to protect employees and not business owners. They said that she is an equity partner and signed an agreement when she joined the firm, acknowledging that partners can attend meetings and vote on firm business. The agreement also said that she owns her own practice and receives a cut of the firm’s yearly profits.

“At its core, (Doe’s) argument is that for a law firm to have owners it must be run by a committee of the whole, its profits must be shared in accordance with a pre-determined formula and its partners must operate as autonomous, independent contractors who simply share space and divide expenses,” the Proskauer brief stated. “That is not a formulation required by Clackamas; nor is it the partnership plaintiff signed onto when she joined Proskauer.”

The Clackamas case that Proskauer referred to was 2003’s Clackamas v. Wells, which has become a guide to how to determine whether or not a partner is an employee or business owner. In that lawsuit, Deborah Wells stated that she was fired from the Clackamas doctor’s office for having a disability, and she sued under the American with Disabilities Act. The office said that they were ineligible to be sued under the ADA because the firm did not have enough employees because the four physicians on staff were shareholders.

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Jane Doe argued that Proskauer’s rank-and-file partners have no direct control over the firm and that decisions such as firing and hiring are made by a seven-member executive committee in which she is not a part of.

The woman, who is being represented by Sanford Heisler Sharp, said that she is treated like an employee in the fact that her work is affected by the decisions of the committee.



“Ultimately, the overarching question is whether Proskauer exercised sufficient dominion over (the) plaintiff’s employment to be in a position to discriminate and retaliate against her,” the plaintiff’s lawsuit said.

In this case, the committee that Jane Doe is mentioning is one that was elected by the partners to govern. Reuters said that in 2002 there was an age discrimination lawsuit filed against Sidley Austin, and that the judge allowed it to proceed because the partner was ruled by an unelected committee. This key difference may affect Jane Doe’s case against Proskauer, who has used the same defense argument as Chadbourne & Parke, another major law firm that is being sued by a female partner for gender discrimination.

Defense lawyers from Chadbourne & Parke used the same argument of non-employee status in their defense, and Reuters said that these cases “raise really tough questions about the nature of law firm partnership in the era of megafirms.” Reuters pointed out that Proskauer has 730 attorneys and 280 of them are equity partners. A company of that size could not run without centralized management, so is it fair to say that none of the 280 equity partners are treated like employees?

Source: Reuters

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