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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 29, 2013

Dear    :

Your June 28, 2013 letter to U.S. Equal Employment Opportunity Commission (EEOC) Chair Jacqueline A. Berrien 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 "applaud" what you refer to as "EEOC's plan to expand coverage of the [ADEA] as to accounting firm partners." You assert that your experience addressing the "forced retirement of CPA partners" demonstrates that many large CPA firm "partners" are "partners in name only" and that "the overwhelming number of accounting 'partners' never reach the level of partner responsibility" for a variety of reasons.

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.(2) This principle does not represent an expansion of the ADEA. The relevant question in each case 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.(3)

In Clackamas Gastroenterology Assocs., P.C. v. Wells,(4) 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."(5) 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."(6)

Even before Clackamas was decided, the federal courts of appeals 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,(7) 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,(8) 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 neither be an expansion of the ADEA nor the result of an EEOC plan "to expand coverage of the [ADEA] as to accounting firm partners."

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 Carol Miaskoff, Assistant Legal Counsel, at 202-663-4645 or Davis Kim, Senior Attorney Advisor, at 202-663-4736.


Peggy R. Mastroianni
Legal Counsel


(1)  29 U.S.C. §621, et seq. 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) See U.S. Equal Emp't Opportunity Comm'n, Compliance Manual Section 2: Threshold Issues, §III.A.1.d. (May 12, 2000),

(3) Id.

(4)  538 U.S. 440, 449-50 (2003).

(5) Id. at 445-46.

(6)  Id. at 451 (citation omitted).

(7)  100 F.3d 436, 443-44 (6th Cir. 1997).

(8) 315 F.3d 696, 707 (7th Cir. 2002).

This page was last modified on August 15, 2013.