8th Circuit OKs law firm's mandatory retirement age

By Scott Lauck
BridgeTower Media Newswires
 
ST. LOUIS, MO — The 8th U.S. Circuit Court of Appeals ruled Dec. 3 that federal age discrimination laws don’t prevent Armstrong Teasdale from forcing an equity partner to retire at age 70.

The ruling brings to an apparent close part of a long-running dispute between one of Missouri’s largest law firms and Joseph von Kaenel, a former partner at the firm. Von Kaenel, who had been with Armstrong Teasdale since 1972, was required under a firm policy to retire in 2014 after he turned 70. He argued that the mandatory retirement age was discriminatory.

Missouri’s courts, however, said his claim didn’t fall under the state’s discrimination laws. Similarly, the 8th Circuit ruled that von Kaenel isn’t protected by the federal Age Discrimination in Employment Act either. As an equity partner, the court said, von Kaenel’s compensation and working conditions “simply do not bear a close relationship to that of an employee.”

“Consistent with the manner in which the term ‘employee’ has been interpreted under federal anti-discrimination laws, we conclude von Kaenel was not an employee of the firm and, therefore, is not covered by the ADEA,” Judge Ralph R. Erickson wrote.

The law firm’s retirement policy requires partners to leave at the end of the year in which they turn 70. Retiring partners receive severance benefits for two years, but only if they cease the private practice of law.

In his lawsuit, von Kaenel alleged that he’d wanted to practice until he was 75 and would have remained at Armstrong were it not for the retirement policy. After leaving Armstrong, von Kaenel forwent the severance package and joined Evans & Dixon’s business law practice group, where he remains of-counsel.

Von Kaenel filed charges of age discrimination with the U.S. Equal Employment Opportunity Commission and the Missouri Commission on Human Rights. The Missouri commission held that, because von Kaenel was 70 years old, he fell outside the age group protected by state law. A Cole County judge upheld that ruling in 2017, also ruling that equity partners aren’t covered employees under the Missouri Human Rights Act.

However, von Kaenel received a right-to-sue letter from the federal commission and filed a lawsuit in 2016 alleging the law firm had violated the federal ADEA. The district court ruled against von Kaenel, and the 8th Circuit affirmed that ruling.

Erickson said it was the first time the 8th Circuit had considered whether a partner in a firm qualifies as an “employee” under the ADEA. But, the court said, the U.S. Supreme Court in a 2003 case, Clackamas Gastroenterology Associates PC v. Wells, declined to apply it to shareholder-director physicians who were part of a professional corporation. The 7th, 10th and 11th circuits also have excluded partner-like positions from the ADEA’s reach.

Among other things, the court noted, von Kaenel was able to share in the firm’s profits and losses, and he could vote on changes to the firm’s policies and the admission of new partners.

Also, other than through the mandatory-retirement policy, he couldn’t be expelled from the firm without a vote of the other partners. Von Kaenel’s role as equity partner “was not simply a title that carried no legal significance,” Erickson wrote.

Chief Judge Lavenski R. Smith and Senior Judge C. Arlen Beam concurred.

Neal Perryman at Lewis Rice, who represented Armstrong Teasdale, said in an email that the firm was pleased with the court’s “unambiguous holding.”

“The law is settled, at least in this Circuit, that equity partners cannot enjoy both the benefits of the partnership agreement to which they are a party and also the benefits of laws designed for the protection of employees,” Perryman wrote.

An attorney for von Kaenel, Jerome Dobson of Dobson, Goldberg, Berns & Rich, couldn’t be reached for comment.

According to court records, von Kaenel also is pursuing a breach of contract claim he filed in 2018 against Armstrong Teasdale in St. Louis County Circuit Court. A judge is considering the law firm’s request for summary judgment.