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The following is an excerpt from Judge Richard Posner’s opinion for the 7th U.S. Circuit Court of Appeals in EEOC v. Sidley Austin Brown & Wood: [This case] involves a partnership of more than 500 partners in which all power resides in a small, unelected committee (it has 36 members). The partnership does not elect the members of the executive committee; the committee elects them, like the self-perpetuating board of trustees of a private university or other charitable foundation. It is true that the partners can commit the firm, for example, by writing opinion letters; but employees of a corporation, when acting within the scope of their employment, regularly commit the corporation to contractual undertakings, not to mention to tort liability. Partners who are not members of the executive committee share in the profits of the firm; but many corporations base their employees’ compensation in part anyway, but sometimes in very large part, on the corporation’s profits, without anyone supposing them employers. The participation of the 32 demoted partners in committees that have, so far as appears, merely administrative functions does not distinguish them from executive employees in corporations. … The 32 owned some of the firm’s capital, but executive-level employees often own stock in their corporations. … Particularly unconvincing is Sidley’s contention that, since the executive committee exercises its absolute power by virtue of delegation by the entire partnership in the partnership agreement, we should treat the entire partnership as if it rather than the executive committee were directing the firm. That would be like saying that if the people elect a person to be dictator for life, the government is a democracy rather than a dictatorship.

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