The U.S. Equal Employment Opportunity Commission (EEOC) has been busy lately challenging the mandatory partner retirement policies and other practices of large accounting firms.
In two “informal discussion letters” posted by the EEOC this summer, EEOC Legal Counsel Peggy R. Mastroianni states that, “It is well established that in some instances individuals who have the job title of ‘partner’ may qualify as employees for purposes of the [equal employment opportunity] laws, including the [Age Discrimination in Employment Act].”
Mastroianni cites the Supreme Court’s 2003 decision in Clackamas Gastroenterology Assocs., P.C. v. Wells, as affirming the EEOC’s position that a fact-specific analysis of relevant factors is necessary on the question: “There is no legal presumption that an individual who holds the title of ‘partner’ is never an employee. This determination depends on the actual working relationship between the individual and the partnership. The relevant question is whether the individual acts independently and participates in managing the organization (not an employee), or whether the individual is subject to the organization’s control (an employee).”
While these letters do not stake out a new position for the EEOC, they remind us that firms with working “partners” or “shareholders” should always examine the partner-employee issue closely before implementing rules — such as mandatory retirement — that would be unlawful if imposed upon employees.
Michael Homans is a Labor & Employment attorney and founding partner of HomansPeck LLC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.