Partners Behaving Badly: Employment Claims in Partnerships Partners Behaving Badly: Employment Claims in Partnerships

Partners Behaving Badly: Employment Claims in Partnerships

The stereotypical villains from the business world portrayed by Hollywood come from multinational corporations (think Big Oil, Big Pharma, or pretty much any industry that can be preceded by “Big”) or sometimes even family-owned businesses (Corleone Family, anyone?). In the real world, however, corporations and family-owned businesses do not have a monopoly on the risk of legal liability. In the world of employment law, professional service firms and other businesses structured as partnerships endure employment litigation just like everyone else. In fact, because of their structure, such firms may be more susceptible to employment claims than corporate entities.

Partnerships may be particularly vulnerable to discrimination claims for several reasons. First, despite the collegiality associated with the use of the term “partner,” the legal definition of partner might not fit every circumstance. Therefore, if persons held out as partners are actually employees, certain policies applied to those individuals may be unlawful. For example, an employee cannot be compelled to retire under an early retirement policy. However, such a policy is lawful for a true partner. Further, an employee might have a discrimination claim for an age related demotion in status or compensation; a true partner is probably unable to assert a discrimination claim for adjustments tied to age.

Governing documents and casual working arrangements may also lend themselves to potential claims of discriminatory treatment by associates or mislabeled partners. For example, in some law firms, lawyers may choose to work with subordinates based upon characteristics which are personal or subjective in nature. Work assignments may not be governed by any particular structure, and very successful lawyers are often fiercely independent of management oversight. Loose rules concerning how younger lawyers receive important assignments and secure opportunities to work with more experienced lawyers can lead to perceptions of unfair treatment. Moreover, lawyers often work under pressure, and challenging projects or cases can prompt thoughtless comments after long and stressful hours. Any one of these facts or circumstances could expose a firm to claims for discriminatory treatment, even if no actual discrimination occurred. The same factual scenarios may occur in other professional service firms including accounting and medical practices, as well as consulting businesses.

Frequently, professional service firms structured as partnerships are not large enough to support sophisticated human resources personnel, do not have published work rules and do not conduct regular training on harassment and discrimination issues. Further, regular performance evaluations are either not conducted or are inaccurate.
 
The lessons for partnerships are familiar, but worthy of reinforcement.

  • Employees should receive honest and accurate periodic performance evaluations. The evaluations should contain specific comments concerning actual assignments. 
  • Firms should make certain there is a vehicle for monitoring the distribution of work in a fair and even-handed manner. 
  • Firms should publish standards for promotion. Annual reviews should compare the individual’s quality of work against those standards. 
  • Constructive criticism and difficult decisions should be thoughtful and delivered with appropriate sensitivity by persons who are able to communicate difficult news effectively. 
  • Firms should deal swiftly with stray comments that are delivered in stressful or even routine circumstances. Make certain that young professionals have an effective outlet for voicing concerns about mistreatment or offensive language.
If you have any questions about how to best ensure compliance with employment obligations in your workplace, whether a partnership or some other type of business organization, please contact Jim Davidson at 614-462-2286 or James.Davidson@icemiller.com.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.
View Full Site View Mobile Optimized