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EEOC Informal Discussion Letter

The U.S. Equal Employment Opportunity Commission

EEOC Office of Legal Counsel staff members wrote the following informal discussion letter in response to an inquiry from a member of the public. This letter is intended to provide an informal discussion of the noted issue and does not constitute an official opinion of the Commission.

ADEA: Accounting Firm Partner Coverage

July 25, 2013

Dear    :

Your letter to U.S. Equal Employment Opportunity Commission (EEOC) Chair Jacqueline A. Berrien and the EEOC's Commissioners concerning accounting firm partner coverage under the Age Discrimination in Employment Act of 1967 (ADEA)(1) was forwarded to this office for a response. In this letter, you assert that the EEOC may be considering litigation against accounting firms that could "expand the scope of the [ADEA] by requiring that most partners in the accounting profession be treated as 'employees' for purposes of the ADEA." You assert that accounting firm partners are not covered by the ADEA in part because "it is all of the partners who own and who are ultimately responsible for the firm as a whole." You encourage the EEOC not to "upend the settled business models of the accounting profession by treating accounting partners as 'employees'" and reversing what you describe as a "longstanding EEOC policy that presumes" that partners are not employees.

The EEOC does not comment on its investigations or its deliberative decision making process in particular cases. But we do appreciate the opportunity to address your concerns regarding partner-employee coverage under the ADEA.

As you know, the ADEA prohibits employers with 20 or more employees from discriminating against current or former employees and applicants age 40 and above based on their older age.(2) It is well established that in some instances individuals who have the job title of "partner" may qualify as employees for purposes of the EEO laws, including the ADEA.(3)

There is no legal presumption that an individual who holds the title of "partner" is never an employee. This determination depends on the actual working relationship between the individual and the partnership. The relevant question is whether the individual acts independently and participates in managing the organization (not an employee), or whether the individual is subject to the organization's control (an employee). The EEOC has identified six non-exhaustive factors relevant to making this determination:

  • Whether the organization can hire or fire the individual or set the rules and regulations of the individual's work;
  • Whether and, if so, to what extent the organization supervises the individual's work;
  • Whether the individual reports to someone higher in the organization;
  • Whether and, if so, to what extent the individual is able to influence the organization;
  • Whether the parties intended that the individual be an employee, as expressed in written agreements or contracts; and
  • Whether the individual shares in the profits, losses, and liabilities of the organization.(4)

In Clackamas Gastroenterology Assocs., P.C. v. Wells,(5) the Supreme Court approved of the EEOC's emphasis on "the common-law touchstone of control" when determining whether an individual with the title of partner is an employee under the EEO laws. The Court noted that whether shareholder-directors in that case were employees could not be determined by asking if the shareholder-director position is "the functional equivalent of a partner" because "there are partnerships that include hundreds of members, some of whom may well qualify as 'employees' because control is concentrated in a small number of managing partners."(6) The Court adopted the six-factor control test from EEOC's guidance, emphasizing that the coverage determination depends on "all of the incidents of the relationship . . . with no one factor being decisive."(7)

Even before Clackamas was decided, the federal courts of appeals had similarly focused on the actual working relationship between an individual and the partnership when inquiring whether the individual was an employee within the meaning of the ADEA. For instance, in its 1997 decision, Simpson v. Ernst & Young,(8) the Sixth Circuit considered a variety of factors before holding that an accountant designated as a partner qualified as an employee for purposes of the ADEA. More recently, in EEOC v. Sidley Austin Brown & Wood,(9) the Seventh Circuit held that the EEOC was entitled to partial enforcement of a subpoena to determine whether 32 partners were employees covered by the ADEA.

Thus, if a determination were made in a particular case that individuals holding the title of "partner" are actually employees, it would be a factual determination guided by existing law. It would not be an "expansion" of the ADEA.

We hope this information is helpful to you. Please note that this letter does not constitute an opinion or interpretation of the agency within the meaning of section 10 of the Portal-to-Portal Act as incorporated by the ADEA. If you have further questions, please feel free to contact Christopher Kuczynski, Acting Associate Legal Counsel, at 202-663-4665 or Carol Miaskoff, Assistant Legal Counsel, at 202-663-4645.


Peggy R. Mastroianni
Legal Counsel


(1)29 U.S.C. §621, et seq.

(2) See 29 U.S.C. §623(a).

(3)  See U.S. Equal Emp't Opportunity Comm'n, Compliance Manual Section 2: Threshold Issues, §III.A.1.d. (May 12, 2000),

(4) Id.

(5) 538 U.S. 440, 449-50 (2003).

(6) Id. at 445-46.

(7)> Id. at 451 (citation omitted).

(8) 100 F.3d 436, 443-44 (6th Cir. 1997).

(9) 315 F.3d 696, 707 (7th Cir. 2002).

This page was last modified on August 15, 2013.