Fourth Circuit Says Law Firm Equity Partner Is Not an Employee for Title VII Purposes

Parker Poe Adams & Bernstein LLP

Parker Poe Adams & Bernstein LLP

Title VII of the Civil Rights Act of 1964 protects employees from discrimination based on a range of protected classifications. However, Title VII only applies to employment relationships and cannot be used by contractors, partners, and other people in non-employment relationships with the company. On Tuesday, the Fourth Circuit Court of Appeals (which includes North Carolina, South Carolina, and Virginia) affirmed dismissal of a Title VII lawsuit against a law firm on the grounds that the senior equity partner who filed it was not an employee.

In Lemon v. Myers Bigel P.A., the plaintiff was a senior equity partner who sat on the firm’s board of directors and management committee. She alleged that she was forced to resign her partnership due to race and gender discrimination, as well as retaliation. The district court dismissed the complaint on the grounds that the plaintiff fell outside the definition of an employee under Title VII. The Fourth Circuit panel affirmed this decision, noting that the plaintiff was an owner of the firm, who shared in its profits, had a role in managing the business, and could not be removed without a majority vote of the partnership. This role differs from employment, where the employee typically reports to a supervisor and employment can be terminated without a majority shareholder vote.

This decision likely also applies to other partnerships and professional associations such as accounting firms, architecture firms, and medical practices. While the same reasoning might not apply to junior partners with little say in running the business, partnerships can take measures to make clear that senior partners are not considered, characterized, or treated as employees.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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