April 10, 2012 8:40 PM

Kelley Drye Settles EEOC Age Discrimination Suit Involving Firm Partner

Posted by Brian Baxter

A battle between the Equal Employment Opportunity Commission and Kelley Drye Warren over the firm’s allegedly discriminatory retirement policy has finally concluded with a consent decree that mandates a $574,000 payment to labor and employment partner Eugene D’Ablemont.

The nine-page consent decree, dated April 3, was filed late Tuesday in U.S. federal district court in Manhattan. Bloomberg first reported news of the agreement between the EEOC and Kelley Drye, which has 303 lawyers and 131 partners.

As part of the agreement, Kelley Drye has pledged not to reduce partner pay based on age and will compel current partners to sit through at least a two-hour training session to guard against age discrimination, with additional requirements for executive committee members.

The EEOC filed suit in January 2010 against Kelley Drye. According to court documents, the agency claimed that the firm’s compensation system discriminated against partners based on their age. The suit also accused Kelley Drye of retaliating against D’Ablemont after he filed a complaint with the EEOC.

Kelley Drye’s retirement policy formerly required equity partners to relinquish their equity interest in the firm after age 70, upon which they would become “life partnersâ€� receiving annual payments. Partners like D’Ablemont, who continued to practice, were also eligible to receive a bonus as additional compensation. The EEOC claimed this provision was discriminatory because it paid older lawyers less than their younger colleagues even if they kept working.

The case carried broad implications for law firms, which often see older lawyers step back from partner status into of counsel or part-time positions after hitting a certain mandatory retirement age. Kelley Drye claimed that as a partner, D’Ablemont was not an employee of the firm and thus not entitled to the federal protections afforded employees under the Age Discrimination in Employment Act of 1967.

Kelley Drye did change its retirement policy after being hit with the EEOC action. At the time, the firm told New York Law Journal (a sibling publlication) that it had amended its partnership agreement to allow senior equity partners to work past the age of 70 and judge them based solely on performance.

The Am Law Daily reported last month that settlement talks were officially on between Kelley Drye and the EEOC after a judge ordered the firm to turn over previously sealed documents chronicling D’Ablemont’s quest to get paid by the firm after turning 70. (Click here for a closer look at those records, courtesy of The Am Law Daily’s Sara Randazzo.)

D’Ablemont, 81, did not immediately respond to an after-hours phone call from The Am Law Daily requesting comment on the settlement.

Kelley Drye’s lead counsel in the case, Proskauer Rose labor and employment practice cohead Bettina Plevan, referred a phone call requesting comment on the consent decree to Kelley Drye chair Paul McCurdy and managing partner James Kirk.

Kirk said in an e-mailed statement to The Am Law Daily that Kelley Drye had “long ago changed our retirement policies as they were no longer consistent with the firm’s business interests.” He said Kelley Drye was surprised that the EEOC continued the case for the benefit of a single partner in D’Ablemont.

“The firm has not discriminated or done anything wrong, and the amounts of the monetary settlement payments that cover more than a decade from 2001 through 2011 are consistent with our belief,” Kirk said. “Our decision to settle the case was dictated by the fact that the cost of continuing the case would have far exceeded the cost of the settlement.”

Kelley Drye is not the first firm to draw the EEOC’s ire. Sidley Austin agreed to pay $27.5 million as part of a 2007 settlement with the federal employment monitor, which was acting on behalf of 32 former partners demoted to counsel status by the Chicago-based Am Law 100 the firm in 2009.

Related Stories:

Trove of Unsealed Court Documents Capture Kelley Drye Partner’s Push to Get Paid After Age 70, 4/3/12

Settlement Talks Officially on Between EEOC and Kelley Drye Warren in Age Bias Case, 3/7/12

Is Resolution at Hand in EEOC Bias Suit Against Kelley Drye? 2/1/12

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