Posted June 14th, 2017.
Scott Flaherty, The Am Law Daily
Nearly two months after voting to expel a former partner who is leading a $100 million gender bias suit against Chadbourne & Parke, the firm failed on Wednesday to escape a proposed class action alleging it’s run by an ” all-male dictatorship.”
U.S. District Judge J. Paul Oetken in Manhattan shot down Chadbourne’s motions for summary judgment and to dismiss class and collective action claims in a suit led by former partner, Kerrie Campbell, and two other former Chadbourne partners—Mary Yelenick, who remains at the firm in an of counsel role, and former Kiev, Ukraine, office leader Jaroslawa Zelinsky Johnson.
The decision comes on the heels of new filings lodged late Tuesday in a similar but separate suit in Washington, D.C., federal court against Proskauer Rose. That firm filed pleadings late Tuesday seeking dismissal of an unnamed woman partner’s gender bias claims and a $50 million damages claim.
For Chadbourne, the sex bias suit has coincided with the firm’s preparation for a combination with global legal giant Norton Rose Fulbright. The deal, announced in February, would create a firm with roughly 4,000 U.S. lawyers globally and revenues close to $2 billion. On Wednesday, The American Lawyer affiliate Legal Week reported that the proposed union may be delayed as the two firms work through client conflicts.
Oetken’s ruling in the Chadbourne case considered several motions—summary judgment and dismissal bids on Chadbourne’s part, as well as a motion from Campbell to dismiss counterclaims against her and a plaintiffs’ motion for conditional class certification under the federal Equal Pay Act. At the center of those motions, the judge wrote, is the question of “whether plaintiffs are ’employees’ under the relevant federal statutes and therefore protected within their ambit.”
Concluding that it’s too early to answer that question, Oetken denied the competing motions and ordered “limited” discovery to determine if the three former Chadbourne partners deserve protection under employment laws, or if their former status as partial owners of the firm disqualifies them from bringing the suit. The judge said he would allow the two sides to renew most of their motions after the discovery period.
A Chadbourne representative said in a statement Wednesday that the firm believes the case should have been tossed out before discovery, but remains “confident that after such discovery the court will find that the plaintiffs are not employees under the law, and that their claims should be dismissed.”
The lead lawyer for the woman partners, David Sanford of Sanford Heisler Sharp, said in a statement that the decision shows that law firms may be liable under employment laws for their treatment of partners.
“Discovery will establish that law firm partners are entitled to the full protections of this country’s laws against discrimination and retaliation,” he said.
Oetken’s decision came in one of a trio of pending gender bias suits against large law firms—Chadbourne, Proskauer Rose and Sedgwick—all brought on behalf of current or former female partners represented by Sanford and others at his firm. In both the Chadbourne and Proskauer cases, Sanford is pitted against a defense team led by Proskauer partners Kathleen McKenna and Evandro Gigante. (Seyfarth Shaw is defending Sedgwick.)
In the Proskauer case, McKenna and others filed papers in Washington, D.C., federal court late Tuesday. Seeking the dismissal of a $50 million discrimination suit against the firm, Proskauer argued that the unnamed woman partner at Proskauer who brought the claims, referred to as Jane Doe, has been paid “enormous sums” relative to her contributions to the firm.
Proskauer argued, however, that the Jane Doe suit is an improper attempt to shoehorn claims from an equity partner into federal and state anti-discrimination laws meant to protect employees who hold no ownership stake in a business. Proskauer also maintains that the suit boils down to a complaint from a disgruntled, but already highly paid, partner who wishes the firm had a different pay structure.
“This case is not about gender, nor is it about the relationship between an employer and an employee. It is instead about a single business owner’s discontent that her substantial allocation of firm profits fell short of her ambitions,” Proskauer wrote in a brief.
Responding to the dismissal bid, Sanford Heisler senior litigation counsel Alexandra Harwin said in a statement Wednesday that Proskauer’s argument misses the mark. The separate ruling in the Chadbourne case, she added, “makes clear that law firms aren’t insulated from liability simply because their employees bear the title of ‘partner’ or have signed a ‘partnership agreement.'”
Sanford Heisler has so far declined to name its client in the Proskauer suit, and on May 17 it secured a court ruling that allowed it to proceed for now with an anonymous plaintiff. Details in the complaint—including that the unnamed partner holds practice leadership positions and is based in D.C.—match the professional biography of Connie Bertram, a labor and employment partner who heads Proskauer’s government contractor compliance program and co-heads its whistleblower and retaliation group.
Bertram joined the firm in 2013 from Cooley, and is one of only two woman partners in Proskauer’s D.C. office. The other is securities and white-collar defense lawyer Ann Ashton, who came to Proskauer in 2012 around the time her former firm, Dewey & LeBoeuf, went bankrupt. Proskauer’s motion to dismiss describes the Jane Doe plaintiff as someone who joined the firm four years ago.
In addition to refuting gender discrimination claims, Proskauer’s court filings on Tuesday shed light on the firm’s approach to determining pay for partners. In a declaration, firm chairman Joseph Leccese said partner pay at Proskauer differs from many other firms in Big Law.
Instead of “points” or “shares” that translate to a certain percentage of the firm’s profits, Proskauer’s executive committee reviews a host of quantitative and qualitative factors that seek to measure short-term and long-term contributions to the firm, according to Leccese. The firm also doesn’t base its partner pay on a single year’s performance.
The approach, Leccese said, is “an effort to allocate the firm’s profits in a way that fairly rewards each partner’s overall contribution to the firm’s success and incentivizes firm-minded behavior.”