Two recent decisions illustrate distinctly different sides of the conflicts between men and women that percolate into our courtrooms. Neither is a New Jersey case, but there are lessons for for Garden Staters in both.
In Kirleis v. Dickey, McCamey & Chilcote, P.C., the plaintiff Alyson Kirleis sued the defendant law firm, of which she was a partner, for gender discrimination, claiming that she was paid less than her male counterparts. She sued under Title VII, the Equal Pay Act, and a Pennsylvania discrimination statute. The issue was whether Kirleis, as a partner in a professional services firm, was an "employee " of the firm, a status that would allow her to sue, or an "employer," which would not. The trial court found that Kirleis was an employer and thus found in favor of the law firm.
Kirleis appealed to the U.S. Court of Appeals for the Third Circuit. She fared no better there. In a four page (that’s really short, kids), non-precedential opinion, the court affirmed the judgment of the trial court. The court reviewed the six factors laid out by the Supreme Court in Clackamas v. Wells, and found that Kirleis in fact was a partner in more than name only, and thus was an employer.
The Kirleis decision has implications for all professional services firms, not just law firms. An important lesson to take from this case is that, in order to avoid discrimination claims between partners, care must be taken in setting up a corporate governance structure. Properly done, problems can be avoided. Do it improperly, though, and there can be big problems that could have significant financial ramifications for the organization.
A claim of sexual harassment is the basis for a $7.3 million trial verdict in Redman v. Bernstein, Shur, recently tried in the Superior Court of Maine. We say "basis of" the verdict because the case was a claim for legal malpractice, not a direct claim for sexual harassment.
The facts are contained in this opinion disposing of the parties’ cross-motions for summary judgment. In short, there was a battle between brothers for control of a family-owned business. One brother learned that there was a plot afoot to make him look bad, and a short time later he was accused by a female employee of sexual harassment. The Bernstein Shur firm was consulted on the matter. The jury found that they were negligent in how they handled the harassment claim and awarded $7.3 million against them, ALL of it for emotional distress.
An extreme case with an eye-popping result? Yes, but it serves to emphasize how carefully employers and their attorneys must treat claims of sexual harassment.