The Third Circuit Court of Appeals has rejected the claim of a female law partner suing for gender discrimination under Title VII and the Pennsylvania state anti-discrimination statute. 

Both Title VII and its state counterpart, the Pennsylvania Human Relations Act (“PHRA”), protect only “employees” from discrimination.  As such, partners in law firms and other business associations, traditionally, have been foreclosed from suing under these statutes. 

In Kirleis v. Dickie McCamey & Chilcote, female partner, Alyson J. Kirleis sued Dickie McCamey & Chilcote, alleging that the law firm pays its female lawyers less than males and that male partners had made disparaging remarks to her about the status of women lawyers within the firm.  The federal district court in Pittsburgh granted summary judgment in favor of the law firm on the ground that Kirleis was an equity partner in the firm and, therefore, not an “employee” that could bring suit under Title VII and the PHRA.  According to the federal district court, "[t]he indicia of control and ownership in traditional large firm partnerships tilts toward recognizing equity partners as employers and not employees, although all factors must be considered".  The federal district court opined that Kirleis "shares many of the attributes of traditional equity partners in a large law firm partnership. She owns DMC as much as any other Class A shareholder/director owns it, including members of the executive committee and its officers, and she shares in its profits, losses and liabilities, unlike those employees and associate attorneys whose salaries are fixed."

Kirleis appealed to the Third Circuit, arguing that she should be treated as an ‘employee’ because her work is "subject to the control of" the firm's executive committee, which has the authority to terminate her or any other partner.

The Third Circuit rejected Kirleis’s claim, holding that she was an “employer” as opposed to an “employee” and, thus, not entitled to the protection of employment anti-discrimination statutes.  The Third Circuit based its decision on the findings that Kirleis has the ability to participate in firm governance, the right not to be terminated without a ¾ vote of the Board of Directors for cause, and the entitlement to a percentage of the firm’s profits, losses and liabilities. 

The Third Circuit’s ruling in Kirleis does not necessarily foreclose a non-equity partner from being able to sue his or her employer under Title VII or the PHRA.  Rather, such a partner could potentially have a cause of action if he or she can demonstrate some of the factors of being an “employee”, such as being compensated on a salaried basis, maintaining no control over the business affairs of the firm, or the like.

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.