On June 2, the Supreme Court of BC upheld a ruling made by the BC Human Rights Tribunal (HRT) regarding the validity of an age-discrimination claim brought by John “Mitch” McCormick of Fasken Martineau DuMoulin LLP.
McCormick, an equity partner at Fasken, was required by the terms of a partnership agreement to retire at the end of his 65th year.
Having been in Fasken’s Vancouver office for 41 years, McCormick decided he was unwilling to quietly go out to pasture.
The first issue at hand was to establish if the HRT in fact had jurisdiction over McCormick’s complaint.
Under Section 13 of the Human Rights Code, one cannot discriminate employment based on age; however in order for these restrictions to be applied, one must be in an employee/employer relationship.
However, Fasken viewed McCormick as a partner, not an employee, and therefore the constraints of the code and the HRT’s jurisdiction over the case was void.
Alison Narod, a labour and employment lawyer and partner at Farris, Vaughan, Wills & Murphy, said, “Under the Human Rights Code, there is a definition of employment and it is quasi-constitutional legislation. It’s not the constitution act itself but in a sense it trumps ordinary legislation, and courts and tribunals have interpreted its benefit and remedies quite broadly and been generous and flexible with their rulings.”
The tribunal issued its decision on the matter in December of last year and decided that for its purposes McCormick was an employee and therefore it had jurisdiction over his complaint.
When the case came before the Supreme Court, where it was ultimately upheld, Justice Catherine Bruce found that the way Fasken had structured itself was determinative. The amount of control and decision-making that the partners had given to a small group of managing partners over their working conditions made them effectively in an employment relationship.
The HRT is set to decide on the merits of the age-discrimination case in the fall; however Fasken has taken their argument to the BC Court of Appeals. That case will also be heard in the fall.
Narod said this decision might have far-reaching effects.
“If you give power and control over your working conditions to others in the partnership and they essentially act as a manager, you can put yourself in a position where you are an employee and that other person may be seen as acting on behalf of the partnership as a whole. And once a partnership is brought under the code, it exposes them to other discrimination liabilities: race, disability, gender,” said Narod.
Warren Smith, managing director of the Counsel Network of BC, a legal recruiting firm, says many local firms are watching McCormick’s case closely.
He foresees the issue only growing bigger with the baby boom generation now coming close to retirement age.
However, Smith does not see mandatory retirement as a dead-end street for aging lawyers.
“As long as there are firms out there without these policies, as long as that lawyer is a value-add – whether they offer mentorship or practice or a unique skill or asset or clients – they will go somewhere. And there are firms out there who say, ‘We can take this talent and the market out there is a boon to us.’”
Smith believes that the biggest challenge for law firms if retirement policies are eliminated is a talent drain.
“If you have a situation where lawyers are allowed to practise in perpetuity, the younger partners, who are ultimately looking to spread their wings and build their practices, will walk out the door if they don’t think there is a future for them there,” said Smith.
“Its great to have all the resources, talent and experience that a senior partner brings to the table, but what if the unintended consequence of that person staying forever is your next bright star goes across the street to another firm?”
According to Smith, that happens in the market every day anyway because no firm has a perfect lock on the perfect succession plan and the perfect system.
He sees a solution in a growing trend he has seen in some firms.
“There are firms in this market today that create models or incentive systems that encourage partners to go about an active transition of their practice. And you can create a model that rewards a partner for successfully transferring their practice. The key is to turn it to the self-interest of the partner, not to set an arbitrary line in the sand and say this is when it must happen.”