PREGNANCY AND PARTNERSHIP: A LAW FIRM PARTNER'S ANTI-DISCRIMINATION SUIT

By JOANNA GROSSMAN


lawjlg@hofstra.edu
----
Tuesday, Dec. 19, 2000

Nina Grayson recently filed a sex discrimination complaint against Dechert, a large law firm where she held a partnership until she resigned last July. The basis for Grayson's complaint is the way the firm treated her following a maternity leave.

[pregnancy]

Grayson claims that when she tried to use vacation time to extend her maternity leave, a senior partner threatened that she would "suffer the consequences," withheld pay to which she was entitled, and treated her with hostility upon her return. The firm, of course, denies Grayson's allegations; it claims that her separation from the partnership was based on differences about the extent of her commitment to the firm.

Grayson's case will proceed through the Equal Employment Opportunity Commission (EEOC) charge process, and perhaps ultimately to state or federal court. In the meantime, this case raises some important issues about the rights of working pregnant women. It also raises the interesting question of whether these rights extend to a pregnant woman who is a profit-sharing partner in a law firm, rather than one of its salaried employees.

The Creation of Anti-discrimination Rights for Working Pregnant Women

Pregnant women are protected against discrimination in the workplace by several federal laws.

As originally enacted, Title VII of the Civil Rights Act of 1964 prohibited discrimination on the basis of sex, but did not explicitly prohibit discrimination on the basis of pregnancy. Moreover, in two landmark cases, the Supreme Court interpreted first the Equal Protection Clause of the Constitution, and then Title VII, to mean that pregnancy discrimination was not a form of sex discrimination, thereby leaving pregnant women without any federal protection against discrimination.

The Pregnancy Discrimination Act

The PDA made two important changes to Title VII. First, it redefined "sex" to include "pregnancy, childbirth, or related medical conditions," thereby making pregnancy discrimination equivalent to sex discrimination under the statute. This change protects women from formal policies disadvantaging pregnant women, as well as from other employment actions that are motivated by animus or hostility to pregnant women.

Second, the PDA adopted a minimum standard for providing leave and benefits to pregnant women: pregnant women must be treated as well as comparably disabled workers. Moreover, a subsequent Supreme Court case interpreted that standard to be a floor, not a ceiling–meaning that employers can choose to treat pregnant women better than temporarily disabled workers, rather than being required to treat the two groups exactly the same. (The rights and benefits to be compared, in this context, may include the length of leave given and whether it is paid or unpaid, the continuation of insurance or other benefits during leave, and the right to reinstatement upon return.)

As a practical matter, this minimum standard means that employers cannot selectively disadvantage pregnant workers, although they may selectively advantage them. For example, if an employer offers leave to temporarily disabled workers, it must — at a minimum — offer leave on the same terms to pregnant women.

Pregnancy Leave and Post-Pregnancy Return-to-Work Rights and Standards

For an employer that offers leave for temporary disabilities, how long must pregnancy leave last? Probably for at least 6-8 weeks, assuming no complications or special circumstances. According to the American College of Obstetrics and Gynecology, in a typical pregnancy, a woman is unable to work for a period of 6-8 weeks encompassing late pregnancy, labor and delivery, and postpartum recovery.

In addition, if a worker who takes a leave because of a temporary disability is guaranteed the right to return to the same job, then a pregnant woman must be given the same opportunity, too.

Of course, an employer may choose to treat all its workers poorly, and offer no disability leave and no maternity leave, equally. But even if an employer decides not to grant disabled workers any rights or benefits, the employer may choose to grant them to pregnant women nonetheless.

Applying these standards, Grayson will have to prove one of three things to make out a violation of Title VII. She could simply show that the firm, Dechert, treated her poorly following her maternity leave because of her pregnancy, rather than for other reasons (say, subpar work performance). Alternatively, she could show that her firm would have permitted a non-pregnant employee, with a similar inability to work, to combine vacation time with paid disability leave — and thus to receive a benefit equivalent to the one Grayson was denied. Or Grayson may try to fit her claim into a harassment mold by alleging that the firm's treatment of her created a hostile working environment based on pregnancy.

Pregnant women may also have rights under a second federal statute, the Family and Medical Leave Act (FMLA). The FMLA guarantees employees at larger companies 12 weeks of unpaid leave for pregnancy or newborn parenting, with a qualified right of reinstatement afterward. The FMLA does not help Grayson, however, because she was trying to take paid rather than unpaid leave.

The Leading Supreme Court Case on Whether Partners Have These Rights

In addition to proving that she was discriminated against on the basis of pregnancy, Grayson will have to overcome a significant legal hurdle: protection under Title VII against pregnancy discrimination, and sex discrimination generally, is only granted to individuals employed by covered employers.

Although there is no decisive ruling from the Supreme Court on this issue, most courts agree that law firm partners are not employees for purposes of Title VII. And because the PDA is simply an amendment to Title VII, its protection against pregnancy discrimination applies only to those workers who are otherwise covered by Title VII.

In the 1984 case of Hishon v. King and Spalding, the Supreme Court held that being considered for partnership is a privilege of employment–one of its "terms and conditions"–for a law firm associate, who is clearly protected by Title VII. Thus, a law firm is constrained by the anti-discrimination rules of Title VII when its current partners together select new partners from its associate ranks, and a woman who is discriminated against in that process has a legally recognized claim against the firm.

But Justice Powell, who concurred in that case, suggested that decisions about partners made after the initial acceptance into the partnership would not be similarly constrained. That is, according to Powell's view, a partnership may discriminate against female partners in dividing profits, assigning cases, selecting management committees, or offering maternity and/or disability leave, without any fear of Title VII liability (although it may run afoul of the FMLA or state anti-discrimination laws). By the same reasoning, male partners could sexually harass fellow female partners without running afoul of Title VII (although again, state anti-discrimination laws might or might not apply).

Lower Courts' Tests as to whether Partners are Protected by Title VII

Justice Powell's view, however, was that of one Justice, not the whole Supreme Court — and Powell himself, of course, is no longer on the Court. Accordingly, in the wake of Hishon, lower courts still struggle with the question of whether a partner may, under some circumstances, qualify for protection under Title VII — or, similarly, under other federal anti-discrimination statutes that also protect only employees, such as the Age Discrimination in Employment Act or the Fair Labor Standards Act.

Many federal courts, including those within the New York-based Second Circuit, where Grayson may ultimately bring her suit, have adopted a general rule that partners are not employees — the rule suggested by Powell's concurrence in Hishon. But most of those courts recognize that such a bright-line rule does not always work, and thus permit exceptions to be made based on a partner's functional role in the firm, or the firm's corporate form.

In addition, some courts distinguish between equity partners, who share in the profits, and non-equity partners, who are salaried–treating only the latter as employees for Title VII purposes.

Other courts apply an "economic realities" test to determine whether a particular person who was (or is) denominated a "partner" in fact had (or has) all the incidents of partnership: an ability to participate in the control and operation of the business, compensation based on profits, and long-term job security. A partner who is a partner in name only — but in reality, an employee — will not be denied the protections of federal anti-discrimination law.

For Grayson, her ability to recover based on a theory of pregnancy discrimination or unlawful harassment will depend on how her relationship to the firm is characterized. Her argument will be, presumably, that she was functionally an employee despite being denominated a partner in Dechert's partnership. In support of this contention, Grayson alleged in her complaint that her compensation was based on both salary and profit sharing, her voting power was minimal, and she was not a member of any firm committees.

If Grayson is denied Title VII protection, she may still have recourse in state partnership law, which generally imposes a duty of good faith among partners. Some women have successfully used partnership law to sue for sex discrimination in this context.

Contributing to the Glass Ceiling: Why Female Partners Deserve Protection

Regardless of how Grayson fares, the lack of protection given to female partners — at least, to those who cannot prove they are effectively employees — under the law raises a larger issue.

Federal anti-discrimination law is an important tool in bringing about workplace equality for women. But if that protection is denied to women who have reached some moderate level of success (such as becoming young law firm partners), then the glass ceiling that keeps women from attaining truly powerful positions in American companies and firms is reinforced. Whether Title VII and similar statutes should be amended to provide such protection deserves careful consideration.


Joanna L. Grossman is a FindLaw columnist. She is an associate professor of law at Hofstra Law School, where she teaches Anti-Discrimination Law, among other subjects. Professor Grossman wrote earlier for FindLaw on the subject of sexual harassment in law firms, in an article archived along with her other columns on the site.

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