Lawyer Lateral Risk (Part 2) — Retirement Rules, Misconduct Investigation & Partner Departure Conflicts

Are Law Firm Mandatory Retirement Policies Enforceable? In This Instance – Yes.” — (Von Kaenel v. Armstrong Teasdale, LLP, No. 18-2850 (8th Cir. 2019)) —

  • “In Von Kaenel v. Armstrong Teasdale, LLP, No. 18-2850, an equity partner at the firm was forced out at age 70 at the conclusion of 2014. He alleged that but for the firm’s mandatory retirement policy, he would have retired at or around 75. After his departure from the firm, Von Kaenel continued to practice law, rendering him ineligible for a two-year severance benefit available to retiree lawyers pursuant to the firm’s policies. Von Kaenel filed charges with both the Equal Employment Opportunity Commission (EEOC) and the Missouri Commission on Human Rights.
  • “The Missouri Commission determined that Von Kaenel fell outside the protected age group, and the EEOC separately terminated its proceedings and issued a Right to Sue. Von Kaenel then filed suit in federal court, where the central issue was whether he was an employee covered under the ADEA.”
  • “Essentially, the question before the Eighth Circuit was whether Von Kaenel was an owner in the firm or an employee subject to protections of the ADEA. In 2003, the United States Supreme Court established a six-factor test in Clackamas Gastroenterology Associates, P.C. v. Wells, 538 U.S. 440 (2003), to determine whether an individual is likely an owner or an employee… The Eighth Circuit also cited favorable decisions from the Seventh, Eleventh, and Tenth Circuit involving shareholders in closely held corporations and bona fide partners in professional firms. There were facts Von Kaenel could not argue around.”
  • “Law firms should be careful in applying this decision. Not all partners in every firm are created equally, and firms with multitiered partnership levels should tread carefully. Most non-equity partners—and even some equity partners, those with little or no management authority, and few voting rights—potentially could be considered employees under the ADEA.”

Insurer Ends $6M Suit Against Buckley Over Founder’s Exit” —

  • “D.C. financial services firm Buckley LLP and an insurance company that revealed that founder Andy Sandler’s abrupt exit was triggered by an internal misconduct investigation have agreed to end a federal suit over a $6 million insurance claim.”
  • “‘The parties have conferred and Buckley LLP consents to this dismissal,’ the notice states.”
    “The withdrawal marks a swift end to a suit that revealed Buckley leaders hired a Latham & Watkins LLP investigator in late 2017 to look into unspecified allegations against Sandler. Within weeks, Sandler had been removed as chairman and then resigned from the firm, a move he characterized internally and publicly as voluntary.”
  • “But Oxford alleged that Buckley leaders were aware that the allegations against Sandler were serious enough that they could lead to his termination, and hid that information from Oxford amid underwriting of a $6 million policy covering business losses stemming from the voluntary departure of ‘key partners.'”
  • “The company argued that it shouldn’t have to pay because Sandler himself had said during a review of the firm’s policy-limit claim that he’d been forced out, despite having negotiated with managing partner Benjamin Klubes and other partners a separation agreement that couched his departure as a ‘retirement.'”
If you liked this post, please share it: