Law School Case Brief
Simpson v. Ernst & Young - 850 F. Supp. 648 (S.D. Ohio 1994)
Partners owe a fiduciary duty to one another. N.Y. Partnership Law § 43. The nature of the fiduciary duty is such that each partner owes to the others the highest degree of fidelity, loyalty, and fairness in their mutual dealings. Because of this fiduciary duty, in their dealings with one another partners cannot fall back on morals of the marketplace.
Plaintiff employee instituted an action against defendant employer for discrimination. After a mistrial, when the jury could not agree whether the employee was in fact an employee or a partner, the parties submitted the issue in a motion for summary judgment. The employee brought an action against his employer under the Age Discrimination in Employment Act (ADEA), 29 U.S.C.S. § 621 et seq., Age Discrimination By Employers, Ohio Rev. Code § 4101.17, the Employment Retirement Income Security Act (ERISA), and state common law for unjust enrichment. The employer argued that the employee was not entitled to the protection offered by these statutes because he was a "partner," not an employee. The employee and the employer sought a determination of whether the employee was in fact an employee under the ADEA and ERISA or a partner.
Was the employee entitled to the protection of the Age Discrimination in Employment Act (ADEA), 29 U.S.C.S. § 621 et seq., Age Discrimination By Employers, Ohio Rev. Code § 4101.17, the Employment Retirement Income Security Act (ERISA)?
The federal district court held that the employee had few, if any, of the meaningful attributes of a partner. The employee had no bona fide ownership interest, no fiduciary relationship with the employer, no share in the profits and losses, no significant management control, no meaningful voting rights, no meaningful vote in firm decisions, and no job security. Thus, he was merely an employee and not a partner. Because the employee was not a partner, the employer could not discriminate against the employee based on his age in violation of the ADEA. Additionally, because the employee was not partner, he was subject to ERISA protection.
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