Sidley Austin Decides to Settle ADEA Suit

October 8, 2007 ( - The Chicago-based Sidley Austin law firm has agreed to pay a $27.5 million settlement to end an age discrimination suit brought by the U.S. Equal Employment Opportunity Commission (EEOC) on behalf of 32 former partners.

The New York Law Journal reports the agreement signed late Thursday by the parties and U.S. District Judge James Zagel of the U.S. District Court for the Northern District of Illinois does not constitute a finding on the merits of the case, nor does it require the firm to admit any wrongdoing. “The Firm believes that settling this case is preferable to the costs and uncertainties of continued litigation,” Sidley said in a statement, according to the New York Law Journal.

The EEOC charged in its complaint that since 1978 Sidley had a policy requiring partners to retire at age 65; the firm argued it never had such a policy. As part of the settlement agreement, the firm agreed not to adopt such a policy and assented to monitoring by University of Chicago law professor Abner J. Mivka, a former federal appellate judge and congressman.

The Sidley settlement will be paid into a fund administered by the EEOC, which said payments to partners would range from $122,169 to $1.84 million.

The EEOC investigation into Sidley Austin began in 2000. The firm had challenged the agency’s jurisdiction and subpoena power on the grounds that Sidley partners were employers and not employees. In the settlement agreement Sidley agreed that the affected partners were employees subject to the ADEA (Age Discrimination in Employment Act) only “[f]or the purposes of resolution of this matter.”

The 7th U.S. Circuit Court of Appeals in 2002 found that the EEOC had sufficiently shown that the affected Sidley lawyers might, in fact, be employees. In his opinion, Circuit Judge Richard Posner noted that Sidley partners lacked most of certain indicia of partnership: they rarely met as a group and never voted on major firm issues, which were largely decided by the self-selecting executive committee, chaired since 1998 by partner Thomas A. Cole.

In February 2006, Posner again ruled against the law firm, giving the EEOC the go-ahead to seek monetary relief on behalf of the affected victims as well as injunctions (See Government Wins Latest in Series of Age Discrimination Rulings ).

In October 2006 the US Supreme Court denied a request by Sidley Austin (See Supreme Court Turns Away Law Firm Age Discrimination Case ) to review the matter.

In the most recent battle between the parties, the EEOC was fighting the law firm’s efforts to seek discovery concerning the subsequent job performance of several partners and the mental health of one.

Sidley Austin, which contended that six former partners were demoted in 1999 due to poor performance, including low billable hours and poor business development skills, wanted to show that new employers have encountered similar performance by the former partners.

However, the EEOC asked that Sidley Austin be denied discovery relating to the billable hours, equity status and business development efforts of the former partners now working at other firms (See Sidley Austin Seeking Discovery of Partners’ Subsequent Job Performance ).