With so many baby boomers reaching traditional retirement age, retirement policies are one of the biggest issues facing today’s employers, including law firms. 

Earlier this month, the Equal Employment Opportunity Commission (EEOC) filed suit against the law firm, Kelley Drye & Warren for age discrimination for its policy of forcing partners who reach the age of 70 to give up their equity interests in the firm.  Under the policy, partners who reach 70 become so-called "life" partners and receive annual payments similar to pension benefits and those who continue to practice also are eligible for a yearly bonus at the discretion of the firm's executive committee. 

The EEOC’s action was prompted by a Charge of Discrimination filed by the former head of Kelley Drye’s labor and employment group, who, according to him, chose to continue working after he turned 70 only to become underpaid in comparison with younger partners with similar fee generation.  He also alleged that the law firm deprived him a share in its large contingency matters. 

The lawsuit against Kelley Drye will likely turn on whether its partners would be considered “employees” and thus protected by the Age Discrimination in Employment Act (ADEA).  Forced-retirement policies may be hard to justify in the big law firm setting where most partners do not participate in decision-making, and under such a governance structure, partners could be considered employees.  Similarly, courts have previously found that partners in large accounting firms who had no meaningful vote in firm decisions and no job security were "employees."

This newsletter is a publication of Nochumson P.C. and is intended for general information only. It should not be construed as legal advice with respect to any particular situation, and readers should not act upon information contained in this newsletter without first consulting an attorney. Copyright © 2009.