Sidley Austin has agreed to pay $27.5 million to settle a closely watched age discrimination suit brought by the U.S. Equal Employment Opportunity Commission on behalf of 32 former partners.

The partners at issue were demoted to counsel status by Sidley in 1999, and most but not all of them ultimately left the Chicago-based firm. In a January 2005 lawsuit filed after a lengthy investigation, the EEOC charged that the demotions were made in violation of the federal Age Discrimination in Employment Act. The firm claims the demotions were based on performance.

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