Law firms risk millions of pounds in damages if they fail to wise up to age discrimination laws being introduced in the UK next year, employment lawyers warned this week, as top-ten US law firm Sidley Austin Brown & Wood faced a high-value claim in the Federal Courts.

The US Equal Employment Opportunity Commission (EEOC) is suing the firm, claiming it breached US age discrimination law by allegedly downgrading older partners or forcing them to take early retirement. The partners' 'back-pay' amounts to millions of dollars, it is claimed.


Gareth Brahams, a partner at City firm Lewis Silkin, said the litigation should serve as a lesson to UK firms. He said: 'At the moment, most of the people who are kicked out at partner level are under 65, which is the level at which compulsory retirement will be set in the UK.


'If you consider the loss of future earnings for a City partner dismissed at 50, the compensation could easily amount to more than £7 million. Unlike most UK employment legislation, discrimination law applies to partners as well as assistants, and age discrimination will be no different.'


He added: 'Firms also need to look at whether they can make a lockstep system work in a situation where they are liable to get sued if they get rid of someone older.'


Sarah Gregory, partner at City firm Baker & McKenzie, said: 'Unlike in the US, where the legislation only applies to employees over 40, in the UK it will apply to any age. Firms will need to take a close look at their graduate recruitment policies as well as any benefits or payments linked to years of service.'


The law suit against Sidley Austin relates to the period before the merger of Sidley & Austin and Brown & Wood, and 31 partners the EEOC claims were downgraded to 'counsel' or 'of counsel' in October 1999, as well as other partners who it alleges were forced to retire since 1978 through the firm's retirement policy.


A Sidley Austin spokesman said: 'The firm has always been committed to a policy of equal opportunity and non-discrimination. Because Sidley is a partnership [which would not be covered by the US legislation], as recognised by the Seventh Circuit Court of Appeals over two years ago, the complaint exceeds the EEOC's authority, was filed in disregard of the Seventh Circuit decision and, in any case has no merit. We will vigorously defend against the EEOC action.'


EEOC regional attorney John Hendrickson said that as the partners involved had no 'voice or control' in the business, they were the same as ordinary employees.