943 F.3d 1139
8th Cir.2019Background:
- Armstrong Teasdale partnership agreement required equity partners to retire at the end of the year they turned 70 unless an exception was granted.
- Joseph S. von Kaenel was an equity partner from 1978 until mandatory retirement at age 70 in 2014; partner compensation reported on K-1 and included profit/loss sharing.
- As an equity partner von Kaenel had voting rights on partnership changes and admission of new partners, made a capital contribution, and could be expelled only by partner vote or retirement rule; his substantive work was not supervised.
- He continued to practice law after leaving the firm and thus lost contractual severance tied to refraining from private practice.
- Von Kaenel filed EEOC and state charges; MCHR terminated proceedings because he was 70; a Missouri trial court found he was not an "employee" under the MHRA.
- He sued under the ADEA; the district court granted judgment on the pleadings for Armstrong Teasdale; the Eighth Circuit affirmed, concluding von Kaenel was not an "employee" covered by the ADEA.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Collateral estoppel from state-court MHRA ruling | von Kaenel: state court made three alternative findings, so the employment finding was not essential and estoppel should not apply | Armstrong Teasdale: state-court determination that von Kaenel was not an employee precludes relitigation | Court did not rest on estoppel; regardless of estoppel, affirmed on alternative ground that von Kaenel was not an employee under federal law |
| Whether an equity partner is an "employee" under the ADEA | von Kaenel: Missouri distinctions and state process mean he should be treated as an employee for ADEA purposes | Armstrong Teasdale: von Kaenel had ownership, profit/loss sharing, voting and managerial authority, and lacked supervision—characteristics of a non-employee partner | Court held von Kaenel was not an employee under the federal multi-factor test (Clackamas/Darden approach); ADEA does not cover him |
Key Cases Cited
- Clackamas Gastroenterology Assocs., P.C. v. Wells, 538 U.S. 440 (2003) (use multi-factor 'all incidents of the relationship' test to determine employee status)
- Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318 (1992) (employee status depends on the totality of relationship factors)
- Schmidt v. Ottawa Med. Ctr., P.C., 322 F.3d 461 (7th Cir. 2003) (shareholder-director with control is not an employee under ADEA)
- Fountain v. Metcalf, Zima & Co., P.A., 925 F.2d 1398 (11th Cir. 1991) (shareholder in accounting firm treated as partner, not employee, for ADEA)
- Wheeler v. Hurdman, 825 F.2d 257 (10th Cir. 1987) (general partners in a firm are not employees under federal anti-discrimination laws)