The legal system handed baby boomers in Minnesota and some nearby states a lump of coal shortly before Christmas.
A ruling issued in mid-December by the federal court of appeals for this region dismissed a lawsuit by an aged attorney who challenged his ouster from his 260-attorney law firm under a mandatory 70-year-old retirement policy.
The Eight Circuit Appellate Court, which oversees federal litigation in Minnesota and six adjoining states west of the Mississippi River, ruled that the Federal Age Discrimination In Employment Act (ADEA) does not apply to partners in law firms.
The tribunal held in von Kaenel v. Armstrong Teasdale that the septuagenarian attorney, who had been with his firm for 42 years was not covered by the measure prohibiting age-based discrimination in employment because he was not qualified as an “employee” protected under the measure.
He did not come within that classification, it reasoned, under multipronged factors that turned on his participation in management decisions and annual payment of a share or percentage of the firm’s profits under its “complicated” compensation formula.
Because the issue had not been adjudicated previously, the decision forms a binding precedent for employers and those who work for them throughout the seven-state area, including Minnesota. It eventually could extend to the rest of the country as well if courts in other geographic sections opt to adopt it.
But the rationale of the ruling is not confined solely to big law firms or to mandatory retirement programs at them or other enterprises. The decision barring age-discrimination claims would seem to apply to all partners of businesses rendering professional services, such as medical clinics, accounting firms, architecture and land-planning companies, financial-services institutions, as well as small and midsize businesses, often comprising family members and other kin, among others. By not viewing partners as “employees” covered by the act, the ruling would permit other forms of disparate treatment against older employees, above the 40-year threshold in the ADEA. That could extend to refusals to promote members to partnership status due to their age, compensation differentials or other disparate age-related treatment, or even discharge.
But there’s more. The reasoning of the case could be imposed on other federal anti-discrimination laws, which are keyed to an employer-employee relationship, including laws barring differential treatment based on gender, religion, race, disability and additional otherwise-protected categories.
The effect stemming from the ruling here in Minnesota and elsewhere could be widespread. It may affect a large number of current baby boomers, those born between 1946 and 1964. Although demographically declining in overall relationship to other age groups as some die, the boomers still comprise a large group. They consist of about 75 millions Americans, more than 20% of the overall population, and some 30% of the workforce in Minnesota. The Eighth Circuit court ruling also would affect those reaching their senior years in the future.
A problem of this magnitude cries out for a solution, and there are several possibilities.
An appeal to the U.S. Supreme Court might happen. But the high court generally refrains from reviewing intermediate appellate rulings until there have been conflicting rulings, which may take years to develop. Even if the jurists in the nation’s capital take the case, there is no assurance they would overturn it and, in fact, could very well affirm it. That tribunal has been notoriously hostile to ADEA claims in recent years, rejecting a number of challenges seeking to broaden its scope.
Another possibility is to change the law by passage of legislation in Congress and signed by President Donald Trump. Good luck on that endeavor!
A measure of that ilk could have the political appeal of benefiting older Americans, a large and high-voting turnout group. But even if approved by the more worker-friendly Democratic-controlled House of Representatives, it is highly unlikely that legislation of that type could break through the D.C. deadlock or make it past the Grim Reaper, Senate Majority Leader Mitch McConnell and his business-friendly Republican colleagues or be approved by President Trump, whose administration has been adverse to employee rights in epic proportions.
Minnesotans aggrieved by age discrimination could seek recourse under the state Human Rights Act, which contains parallel anti-discrimination provisions. But the courts in this state generally follow the reasoning of federal discrimination cases in interpreting the local act.
However, that tendency is not universal, especially in age bias litigation. For example, the courts here have construed the state age law to extend to individuals of any age, even those younger than the 40-year federal limit. Moreover, Minnesota is one of a handful of states that allow so-called reverse-discrimination claims for youthful employees asserting improper treatment because of their age, which is not covered by the federal law.
So, as the page turns on the first two decades of the 21st century, those in the workforce in Minnesota need to be wary of further infringements. And hope that the recent von Kaenel age-discrimination case is not a harbinger for more restrictions on their rights.
Marshall Tanick is a Twin Cities employment law attorney and certified senior civil trial specialist with the law firm of Meyer Njus Tanick.