Social Justice: Law firm partners deserve human rights protections

Taking up the cudgels for an aging law firm partner claiming age discrimination may not appear to be appropriate grist for a social justice column, but upon closer examination the cause appears worthy, particularly as the Supreme Court of Canada gears up to consider the matter.

Lawyer John Michael McCormick was an equity partner at the British Columbia office of Fasken Martineau DuMoulin LLP. Upon becoming a partner, he had signed the firm’s partnership agreement requiring him to retire at the age of 65 in the absence of an agreement to the contrary. With no such agreement offered to him, he filed an age discrimination complaint with the British Columbia Human Rights Tribunal in his 65th year.

I initially thought the case was absurd. How could a partner successfully claim he had been the victim of age discrimination in the course of his employment?

After all, lawyers know that partners are co-owners and not employees and hence protection against age discrimination during the course of employment isn’t available. And McCormick wasn’t just a partner; he was an equity partner with a capital account in the partnership. So what was he thinking when he filed his complaint?

To my surprise, the tribunal rejected the law firm’s motion to dismiss the complaint on a summary basis. Faskens had argued the tribunal lacked jurisdiction because there was no employment relationship between the firm and McCormick. The tribunal accepted it couldn’t consider McCormick to be an employee as a matter of common law and under various statutes. But that wasn’t the end of the inquiry. Interpreting the legislation liberally and considering its broad purposes, the tribunal concluded Faskens did employ McCormick for the purposes of the Human Rights Code.

To my surprise again, the Supreme Court of British Columbia upheld the tribunal’s decision. But it appeared things were in order once again when the British Columbia Court of Appeal allowed the appeal after ruling that “a partnership is not, in law, a separate entity from, but is a collective of, its partners, and as such, cannot, in law, be an employer of a partner.”

The issue resurfaced recently when the Supreme Court of Canada granted McCormick leave to appeal. That’s when I started thinking about the issue. This isn’t merely an issue affecting law firms as it touches upon all manner of professionals who carry on business through partnerships. Further, modern partnerships bear little resemblance to the traditional structures of yesterday involving small groups of people who collectively operated a business and shared profits. Large, modern limited liability partnerships with their management committees and managing partners have more in common with corporations than the business structures of the past.

Most partners have no say in the operation of the business or their pay. Most partners aren’t true co-owners. Non-equity, non-voting, and junior partners may have the prestige of the partnership label but in reality are indistinguishable from employees. Their firms have elevated them to the ranks of partner for various reasons, often to benefit more senior partners. Even most senior partners have much in common with employees. They have little or no say in the running of the business or the setting of compensation. In short, most people with the title aren’t true partners as we’ve traditionally understood the term.

Perhaps we shouldn’t have any sympathy for McCormick. After all, he voluntarily signed the partnership agreement. He agreed to mandatory retirement. He of all people ought to have known that he was signing on as a partner, not as an employee. But the law prohibits contracting out of human rights protections.
And we shouldn’t be focusing on the matter purely as an age discrimination case. If human rights codes don’t apply to partners with respect to age discrimination, they equally wouldn’t apply when it comes to other grounds such as race, colour, ancestry, place of origin, political belief, religion, marital or family status, physical or mental disability, sex or sexual orientation.

So the Supreme Court’s decision to grant leave to appeal is a good thing. The case will provide the court with an opportunity to reverse the narrow interpretation of the B.C. appeal court and allow many partners to enjoy the protection of human rights codes. That’s social justice.

Alan Shanoff was counsel to Sun Media Corp. for 16 years. He currently is a freelance writer for Sun Media and teaches media law at Humber College.  His e-mail address is [email protected].

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