EEOC Investigating Mandatory Retirement Age for Law Firm Partners

By | October 21, 2014

The Equal Employment Opportunity Commission is investigating whether mandatory retirement provisions at Deloitte LLP violate federal employment law.

The American Institute of Certified Public Accountants, the trade association for the profession, entered the fray yesterday, essentially urging the EEOC to back off.

The dust-up could have ramifications for those law firms, including slightly less than half of the largest ones, that still have mandatory retirement ages for their partners.

Ronald Cooper, a partner at Steptoe & Johnson LLP who was a general counsel of the EEOC, said that while it’s impossible to predict the outcome, “the EEOC will probably say that a giant operation that calls itself a partnership where individuals have little or nothing to say about the way the business is conducted isn’t likely to be viewed as an old-style partnership of three or four members.”

As a result, those firms could face liability under the Age Discrimination in Employment Act for forcing out partners of a certain age.

Jim Cotterman, of consulting firm Altman Weil Inc., last studied law firms with mandatory retirement policies in 2007. He said in a phone interview that few of the firms with these provisions eliminated them during the recession, but he expects that to change.

The EEOC’s stance isn’t the issue, he said. Rather, the frenzied lateral hiring market can put firms with mandatory retirement provisions at a distinct disadvantage. Partners in their early 60s often don’t want to retire and may have a significant “book of business” making them attractive to other law firms.

Justine Lisser, an EEOC spokeswoman, declined to comment on Deloitte, citing the confidentiality of investigations.

In September, however, Deloitte general counsel William Lloyd said in congressional testimony that “the EEOC began a directed investigation in 2010, meaning that no individual filed a charge with the EEOC alleging discrimination. To date, we are not aware of any retired partner who has complained to the EEOC about age discrimination.”

Two law firms — Sidley Austin LLP and Kelley Drye & Warren LLP — faced EEOC claims over mandatory retirement. Because Sidley settled in 2007 and Kelley Drye settled in 2012, neither case created any precedent, Cooper said.

“It will be a rare law firm that will want to take it on and duke it out with the agency rather than settle for money,” according to Cooper.

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