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In a case that could have major repercussions, the U.S. Equal Employment Opportunity Commission (EEOC) is investigating whether Chicago’s Sidley Austin Brown & Wood was guilty of age discrimination when it demoted some partners in 1999. The EEOC contends that some partners at the firm might be “employees” under the federal law against age discrimination and thus subject to its protections. In September 1999, Sidley Austin made 32 partners “senior counsel” or “of counsel.” More than half of the demoted partners were reportedly in their mid- to late 50s or early 60s. The firm also changed its retirement age for partners from 65 to a range between 60 and 65. The federal age discrimination law prohibits having any retirement age for employees. The actions took many Sidley Austin lawyers by surprise. The EEOC office in Chicago was contacted by “a confidential government informer from within Sidley,” who complained that the firm was guilty of age discrimination, according to an agency brief. (The firm’s name was Sidley & Austin before it merged in May 2001 with Brown & Wood. Now known as Sidley Austin Brown & Wood, it is the sixth-biggest in the country in number of lawyers, at about 1,400.) The EEOC, which has never sued a law firm under similar circumstances, launched an investigation of Sidley Austin’s compliance with the Age Discrimination in Employment Act. On July 5, 2000, the agency requested information about Sidley Austin’s partnership, which the law firm turned over. It also asked for information about the demotions and about all partners from January 1999, which Sidley Austin refused to turn over. The request included the partners’ ages, compensation, reasons for leaving the firm and whether changes in status, such as retirement, were voluntary or forced. On Feb. 11, U.S. District Judge Joan Lefkow of the Northern District of Illinois ordered Sidley Austin to produce the requested material. Paul Grossman of Los Angeles-based Paul, Hastings, Janofsky & Walker, who is representing Sidley Austin, said the firm will appeal to the 7th U.S. Circuit Court of Appeals. EEOC v. Sidley & Austin, No. 01C9635 (N.D. Ill.). “We have a national policy that people who are employees are entitled to basic protections against discrimination,” said Robert W. Hillman, a professor at the University of California, Davis School of Law. “The core question is: Are partners in large law firms like the employees Congress intended to protect with this legislation?” He said that Sidley Austin’s partnership is similar to that of many large firms. “There’s nothing all that unusual about the structure of Sidley & Austin, so the results will be relevant to all law firms that have centralized management,” he said. But John Hendrickson, the EEOC’s regional attorney in Chicago who is overseeing the investigation, said Sidley Austin’s organization is atypical. When he talks about the case with other lawyers, “the knee-jerk reaction is they all are organized this way.” But when he asks if they know of other firms where partners don’t vote on admissions or expulsions or even for executive committee members, the other lawyers shake their heads, he said. Asked if the EEOC plans to investigate all firms with management structures like Sidley Austin’s, Hendrickson laughed. The “EEOC looks bigger and more ferocious from the outside,” he said. “We do not target particular industries. Whether other law firms are going to be investigated, I have no idea.” The threshold issue, all agree, is whether Sidley Austin’s demoted partners were truly partners. But in a subpoena enforcement action, as the EEOC said in a brief, it “is not required to prove that certain Sidley partners are not truly partners, but only that the coverage issue is contestable.” The brief says, “Sidley’s Partnership Agreement … demonstrates that the thirty-six member Executive Committee dictates every major aspect of firm governance including each partner’s compensation; admission of any new partner; the termination or expulsion of any partner; and (most importantly) who sits on the Executive Committee.” Furthermore, the agency argued in another brief, “most partners have not and do not vote ever on anything period.” SIDLEY AUSTIN’S RESPONSE Sidley Austin’s managing attorneys and outside counsel declined to answer questions, preferring to let their briefs speak for them. One brief says: “No court has ever found a partner in a professional partnership to be a covered ‘employee’ where (as here): the partner shared in the profits and losses of the firm, and was liable for the partnership’s debts; the partner contributed significant capital; and the partner could bind the firm and had management/supervisorial responsibilities.” In addition to the executive committee, “virtually every Sidley partner serves on one or more of Sidley’s 25 administrative committees,” it says. “Sidley has cooperated fully in the EEOC’s investigation by producing extensive responsive documents and other information pertaining to the jurisdictional question. Yet, the EEOC … despite having received undisputed evidence that conclusively demonstrates that the EEOC has no jurisdiction, and despite the absence of a charge filed by any allegedly aggrieved party, or even by the EEOC itself, has issued a merits subpoena for confidential partnership documents.” According to court filings, no Sidley Austin lawyers were dismissed at the time of the demotions, and about half still work for the firm. One of those is Robert Barr, who was demoted to senior counsel. When asked for his opinion on the merits of an age discrimination suit, he said, “It’s not my area of the law.” Barr said he has set his retirement date in June, when he’ll be 66. He said he hasn’t felt pressured to leave. Three other partners who were demoted and remain at the firm declined to comment. Wayne Outten of New York’s Outten & Golden, which represents employees in employment cases, said he believes “there’s a serious question as to whether these partners shouldn’t be deemed employees under the discrimination laws.” But he cautioned, “Even if a court were to determine that some of the partners were ‘employees’ … that doesn’t mean that the court would determine on the merits that the firm’s demotions violated prohibitions against age discrimination.”

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