Hishon v. King & Spalding Brief of Petitioner
Public Court Documents
January 1, 1982
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Brief Collection, LDF Court Filings. Hishon v. King & Spalding Brief of Petitioner, 1982. dc7cfc48-b89a-ee11-be36-6045bdeb8873. LDF Archives, Thurgood Marshall Institute. https://ldfrecollection.org/archives/archives-search/archives-item/6de9a65b-2cf0-43b2-a844-2e8cd10fa378/hishon-v-king-spalding-brief-of-petitioner. Accessed December 04, 2025.
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No, 82-940
In The
Supreme Court of the United States
October Term 1982
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ELIZABETH ANDERSON HISHON,
YS.
Petitioner,
KING & SPALDING,
Respondent.
------------- o-----------—-
ON CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
------------ o-------------
BRIEF OF PETITIONER
— o---------- -—
E m m et J. B ondttrant
E dward B . K rttgman
B ondxjrant, M iller , H tsho:n
& S teph en so k
2200 First Atlanta Tower
Atlanta, Georgia 30383-4501
(404) 688-0350
Counsel for Petitioner
COCKLE PRINTING CO., 2311 Douglas St., Omaha 68102
1
QUESTION PRESENTED
Whether King & Spalding and other large institu
tional law firms that are organized as partnerships are,
for that reason alone, exempt from Title VII of the Civil
Eights Act of 1964, and are free (a) to discriminate in the
promotion of associate lawyers to partnership on the basis
of sex, race or religion; and (b) to discharge those asso
ciates whom they do not admit to partnership based on
reasons of sex, race or religion under an established “up-
or-out” policy.
11
INTERESTED PARTIES
The following listed parties have an interest in the
outcome of this case:
Elizabeth Anderson Hishon (Petitioner)
King & Spalding (Respondent)
William K. Meadows
Charles L, Gowen
Hughes Spalding, Jr.
James M. Sibley
Griffin B. Bell
Charles H. Kirbo
John Izard
Pope B. Mdntire
Kirk M. MeAlpin
Frank C. Jones
Richard A. Denny, Jr.
Harry C. Howard
William H. Izlar, Jr.
R. Byron Attridge
Bradley Hale
Robert W. Hurst
Robert L. Steed
Henry Hall Ware III
Daniel J. O’Connor, Jr.
Hugh Peterson, Jr.
John A. Wallace
Edward J. Hawie
John C. Staton, Jr.
David Lee Coker
John D. Hopkins
A. Felton Jenkins, Jr.
G. Lemuel Hewes
Horace H. Sibley
Charles M. Shaffer, Jr.
W. Donald Knight, Jr.
Joseph R. Gladden. Jr.
Ill
James H. Wildman
Joseph B. Haynes
Herschel M. Bloom
Michael C. Russ
Charles H. Battle, Jr.
Walter W. Driver, Jr.
Russell R. French
George H. Lanier
Lanny B. Bridgers
Clarence Haverty Ridley
William C. Clineburg, Jr.
Richard G. Woodward
Theodore M. Hester
William F. Nelson
James A. Rubright, Jr.
Joseph R. Bankoff
Ralph B. Levy
Donald S. Kohla
John Trapnell Glover
Nolan C. Leake
Charles H. Tisdale, Jr.
Russell B. Richards
George S. Branch
Michael E. Ross
Ruth West Garrett
William B. Fryer
Michael R. Horton
Scott J. Arnold
Bruce N. Hawthorne
Albert H. Conrad, Jr.
Henry L. Bowden, Jr.
Partners in King & Spalding*
As listed in Martindale-Hubbell Law Directory 1982.
IV
TABLE OF CONTENTS
Question Presented.............. i
Interested P arties.................... -................................... ii
Table of Authorities...................................................... vi
Opinions and Judgments Below.................. 1
Jurisdiction ....... 1
Statutes Involved........................................................... 1
Statement of the Case .. ............................. ............. ... 2
The Allegations of the Complaint............. ........... 3
The Proceedings Below...... ............................ 4
Summary of Argument................. 10
Argument :
Page
I. The Befusal to Apply Title VII to Partnerships
Would Be a Significant Blow to the National
Goal of Eradicating Job Discrimination............. 15
A. Law Partnerships are Big Businesses and
Bepresent Significant Job Opportunities in
the Legal Profession. ______ ____________ 15
B. Employment Discrimination Against Women
and Minorities is a Serious Problem in the
Legal Profession, Deeply Booted in its His
tory........ .................................................. 18
II. Because the Complaint was Dismissed for Want
of Subject-Matter Jurisdiction, the Judgment
Below Must Be Eeversed “Unless it Appears
Beyond Doubt that the Plaintiff Can Prove No
Set of Facts in Support of [Her] Claim” that
Sex Discrimination by Law Firms in the Selec
tion of Partners Is Prohibited by Title VII......... 23
III. Discrimination by Law Firms in the Selection of
Partners and the Discharge of Those Associates
who Fail to Make Partner Because of Sex, Eace,
V
Religion, or National Origin, Are “Unlawful Em
TABLE OF CONTENTS—Continued
Page
ployment Practices” that Are Prohibited by §703
(a)(1) and (2) of Title VII.................................. 24
A. Title VII is to be Liberally Construed, and
Exceptions Are Not to be Read into the Stat
ute Without Clear Congressional Intent....... 25
B. Economic Reality and Not Common-Law Def
initions Determines Whether a “Partner” is
an “Employee” of the Firm for Purposes of
Title VII. ................ ................ ......................... 27
C. Discrimination by a Law Firm In the Selec
tion of Partners from Among Its Associates
Based on Race, Religion, Sex or National Or
igin, Violates Title VII............... .............. ...... 30
1. The Entity Theory
(a) A large law partnership is an entity
that has an institutional identity sep
arate from that of its individual
partners and can he considered as
the “employer” of a partner for
Title VII purposes................ 31
(h) King & Spalding’s partnership agree
ment modifies state law to give King
& Spalding the essential attributes
of incorporation........................... 34
(c) The fact that a partner in King &
Spalding may have a limited “own
ership” interest in firm assets or is
paid from “profits” does not alter
the primary nature of the relation
ship as one of employment................ 38
2. The Opportunity Theory
By holding out to petitioner and to oth
er associates the promise of equal con
sideration for partnership, King & Spald
ing made the opportunity of promotion
VI
to partnership a “term, condition or priv
ilege” of employment and an “employ
ment opportunity” of its associates that
is covered by Title VII............................ .... 41
D. King & Spalding’s Decision to Deny Plaintiff
Admission to Partnership Based on Sex Also
Resulted in the Termination of Her Employ
ment as an Associate and thus Violated § 703
TABLE OF CONTENTS—Continued
Page
(a)(1) and (2) of the Act__ ____ __________ 47
Conclusion ................ ..................................................... 49
TABLE OF AUTHORITIES
Cases
Andrus v. Glover Construction Co., 446 U. S. 608
(1980) .................................... 26
Armstrong v. Phinnev, 394 F. 2d 661 (5th Cir.
1968) ............................................................ 31
Bates v. State Bar of Arizona, 433 U. S. 350 (1977) ...21, 28
Beilis v. United States, 417 U. S. 85 (1974) ..............12,16,
32, 33, 34, 35
Blank v. Sullivan & Cromwell, 418 F. Supp. 1 (S. D.
N.Y. 1975) .. ........... ........................................... 11,22,25
Bonilla v. Oakland Scavenger Co., 697 F. 2d. 1297
(9th Cir. 1982) ..... 12,39,45
Bradwell v. Illinois, 83 U. S. 130 (1873) ..................... 19
Bryan v. Maddox, 249 Ga. 762, 295 S. E. 2d 60
(1982) ........................................................................ 38
Cannon v. University of Chicago, 441 U. S. 677
(1979) ................... 30
City of Wheeling v. Chester, 134 F. 2d 759 (3d
Cir. 1943) .......... ..................... ............................. 31.
V ll
Clark v. Olinkraft, Inc., 556 F. 2d 1219 (5th Cir.
1977), cert, denied, 434 U. S. 1069 (1978) .............. 44
Conley v. Gibson, 355 U. S. 41 (1957) ..................... ... 24
Connecticut v. Teal, 50 U. S. L. W. 4716 (June 21,
1982) (No. 80-2147) .................... ........ 10,11,26
Continental Casualty Co. v. United States, 314
U. S. 527 (1942) 26
County of Washington v. Gunther, 452 U. S. 161
(1981) ................................................................. 11,27
EEOC v. First Catholic Slovak Ladies Association,
694 F. 2d 1068 (6th Cir. 1982) ..................... 13,39,45,46
Franks v. Bowman Transportation Co., 424 U. S.
747 (1976) .................................................................11,26
Goldberg v. Whitaker House Cooperative, Inc.,
366 U. S. 28 (1961) .......................................11,13, 29, 39
Golden State Bottling Co. v. NLRB, 414 IJ. S.
168 (1973) ..................................................... ............ 14,43
Goldfarb v. Virginia State Bar, 421 U. S. 773
(1975) .............................................................10,21,24,25
Hargrove v. Oki Nursery, Inc., 646 F. 2d 716 (2d
Cir. 1980) ................................. 30
Harwell v. Cowan, 175 Ga. 33, 165 S. E. 2d 19 (1932) 35
Hishon v. King & Spalding, 678 F. 2d 1022 (11th
Cir. 1982) ..........„...................................1,8,27,42,45,46
Hishon v. King & Spalding, 25 Enrpl. Prac. Dec.
(CCH) U31,703 (N.D. Ga. 1980) ........... 1,6,47,48
Kohn v. Rovall, Koegel & Wells, 496 F. 2d 1094 (2d
Cir. 1974) .............................................................11, 22, 25
Lucido v. Cravath, Swaine & Moore, 425 F. Supp.
123 (S. D. N. Y. 1977) .........................11,14,15, 25, 43,48
TABLE OF AUTHORITIES—Continued
Pages
V l l l
McLain v. Real Estate Board of New Orleans, Inc.,
444 U. S. 232 (1980) ............. ...... ......... ...8,10, 23, 24, 47
NLRB v. Bell Aircraft Corp., 206 F. 2d 235 (2d
Cir. 1953) ............................................................ 14,42,43
NLRB v. Hearst Publications, 322 U. S. I l l
(1944) ...... .............................................. .............11, 29, 30
Pettway v. American Cast Iron Pipe Co., 494 F.
2d 211 (5th Cir. 1974) .........................14, 39, 40,41,45, 46
Pettway v. American Cast Iron Pipe Co., 332 F.
Supp. 811 (N. D. Ala. 1970) ....................................13, 40
Rogers v. McDonald, 224 Ga. 599, 163 S. E. 2d 719
(1968) ............. ....................................... .................. 37
United States v. Silk, 331 U. S. 704 (1947)..................11, 29
TABLE OF AUTHORITIES—Continued
Pages
S tatutes
28 U.S. C. §1254 (1 ) ................................................... 1
28 U. S. C. § 1331______________________________ 3
42 U. S. C. '§ 2000e, et seq. (Title YII of the Civil
Rights Act of 1964) ................................... ...........passim
42 U. S. C. § 2000e (Section 701 of the Civil Rights
Act of 1964) ........................................................ 1,10, 24
42 U. S. C. '§ 2000e-2 (Section 703 of the Civil
Rights Act of 1964) ............. ...2, 4, 9,10,11,14,15, 24, 25
O. C. G. A. ■§ 14-8-90 (Ga. Code Ann. § 75-107) ........ 35
§ 14-8-42 (Ga. Code Ann. § 75-203) .......... 37
§14-8-45 (Ga. Code Ann. §75-206) 38
IX
F ederal R ules op Civil P rocedure
Rule 12 (b) (1) ........................ .........................3,6,8,10,24
Rule 12 (b) (6) ............................................ ........ ...... 24
Rule 3 7 ............................... .......-.................... .............6, 34
TABLE OF AUTHORITIES—Continued
Pages
T exts
M. Abram, The Day is Short (1982)............. — .......... 21
Association of American Law Schools, Prelaw
Handbook 1982-83 (1982) ___ ______ — ................. 20
Bower, A Survival Guide For Associates, Barrister,
Yol. 6, No. 1 (Winter 1979)................. ...................... 42
C. Clark, Minority Opportunities in Law For
Blacks, Puerto Ricans <& Chicanos (1974)________ 22
J. Crane and A. Bromberg, Law of Partnership (1968) 32
C. Epstein, Women in Law (1981).........................19,20,22
J. Goulden, The Superlawyers (1972) ------------------- 16
P. Hoffman, Lions in the Street (1973) ................... 16,19
Webster’s Third New International Dictionary
(3d ed. 1976) .................................................... ............. 27
Articles
Bad Day at Kulak Rock, National Law Journal,
November 2, 1981 ------------------------- --------------- 31
Barber, Employment Discrimination Against Women
Lawyers, 59 A.B.A.J. 1029 (Sept. 1973) ___ ______ 20
C. Epstein, The Partnership Push, SAVVY, March
1980 _______ ________________ ____ __________ 22
The First Friend, Newsweek, Jan. 24,1977---- -------- 17
Flaherty, Women & Minorities: The Gains, Na
tional Law Journal, December 20,1982--------------- 22
X
Goolrick, Equality Under the Law9, Atlanta J.
& Const., June 8, 1980 (Atlanta Weekly Mag
azine) ........... .................... ........ ................ .................. 19
Stevens, Law Schools and Law Students, 59 Va. L.
Rev. 572 (1973) ............. .......... ........ .......... .............. 20
Wayne, The Tear of the Accountant, N. Y. Times,
Jan. 3, 1982 ................. ........ ...................................... 16
L. Wightman, Male-Female LSAT Candidate Study
1969-73, Educational Testing Service (1974) .—........ 20
M iscellaneous
Martindale-Hubbell Law Directory 1944-1977 .............. 3
The Top 200 Law Firms, National Law Journal,
September 13, 1982, at 14;............. — ......... ......... 17
September 20, 1982, at 13............................... ........ 17
October 6, 1980, at 32;.... ......... ........... ................... 17
October 13, 1980, at 34 ........................ — ............. 17
Reuters Ltd., Dateline: Atlanta, June 19, 1979............ 17
U. S. Bureau of the Census, Statistical Abstract
of the United States 1982-83 (103 ed. 1983).......16, 20,21,
22,23
U. S. Dept, of Commerce, Bureau of Census,
County Business Patterns—United States,
United States—Establishments, Employees
and Payroll by Industry by Employment-
Size Class: 1977 ....... ................ -..............
TABLE OF AUTHORITIES—Continued
Pages
17
OPINIONS AND JUDGMENTS BELOW
The opinion of the Court of Appeals is officially re
ported as Hishon v. King & Spalding, 678 F. 2d 1022 (11th
Cir. 1982), and is reproduced as Appendix A to the Peti
tion for a Writ of Certiorari.1 App. A-l through A-16. The
November 25, 1980 opinion of the district court is unoffi
cially reported as Hishon v. King <£ Spalding, 25 Empl.
Prac. Dec. (CCH) ff 31,703 (N. D. Ga. 1980) (Appendix B
to the Petition, App. A-17 through A-26), and the final
judgment dismissing the complaint in conformity with that
opinion was entered on November 26, 1980. R. 272; J.A.
259.2
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JURISDICTION
The judgment of the Court of Appeals for the Eleventh
Circuit was entered on June 17, 1982. Appendix C to the
Petition, App. A-27 through A-28. A timely petition for
rehearing en banc was denied on September 9, 1982. Ap
pendix D to the Petition, App. A-29 through A-30. The
petition for certiorari was filed within 90 days of that date
and was granted on January 24, 1983. 51 U. S. L. W. 3552
(Jan. 24, 1983).
Jurisdiction is conferred on this Court by 28 U. S. C.
§ 1254(1).
---------------- o------------- —
STATUTES INVOLVED
Section 701 of Title VII of the Civil Rights Act of 1964
provides in pertinent p a rt: '
Definitions
(a) The term “person” includes one or more in
dividuals, governments, governmental agencies, politi-
Dhe Petition for a Writ of Certiorari shall be referred to
hereinafter as "the Petition." The Appendix to the Petition
will be cited as "App."
2Joint Appendix.
1
2
cal subdivisions, labor unions, partnerships, associa
tions, corporations, legal representatives, mutual com
panies, joint-stock companies, trusts, unincorporated
organizations, trustees, trustees in cases under Title
11, or receivers.
(b) The term “employer” means a person en
gaged in an industry affecting commerce who has
fifteen or more employees for each working day in
each of twenty or more calendar weeks in the current
or preceding calendar year, and any agent of such a
person, . . .
jg.W W W
(f) The term “employee” means an individual
employed by an employer . . .
42 U. S. C. l§ 2000e(a), (b), (f) (emphasis supplied).
“Unlawful employment practices” are defined in § 703
of Title VII as follows:
(a) It shall be an unlawful employment practice
for an employer—
(1) to fail or refuse to hire or to discharge any
individual, or otherwise to discriminate against any
individual with respect to his compensation, terms,
conditions, or privileges of employment, because of
such individual’s race, color, religion, sex, or national
origin; or
(2) to limit, segregate, or classify his employees
or applicants for employment in any way which would
deprive or tend to deprive any individual of employ-
. ment opportunities or otherwise adversely affect his
status as an employee, because of such individual’s
race, color, religion, sex, or national origin.
42 U. S.C. §2000e-2(a)(l), (2).
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STATEMENT OF THE CASE
Petitioner, Elizabeth Anderson Hishon, is a female
lawyer who was employed by King & Spalding as an as
sociate from 1972 until her discharge in December 1979.
3
Her Title VII complaint3 (E. 4-19; J.A. 6-26) alleging that
King & Spalding discriminated against her on the basis of
sex by denying her promotion to partnership and by termi
nating her employment as an associate under an “up-or-
out” policy was dismissed by the district court for want of
subject-matter jurisdiction under Eule 12(b)(1) on the
ground that Title VII does not apply to sex discrimination
relating to partnership decisions. App. A-17 through A-26.
The Allegations of the Complaint
King & Spalding is a partnership engaged in the prac
tice of law in interstate commerce with offices in Atlanta,
Georgia, and Washington, D. C. Complaint If 2(a); E. 4;
J.A. 6. King & Spalding has more than fifty partners, and
employs more than fifty other lawyers as associates and
more than fifty non-lawyers in secretarial, paralegal and
clerical positions. Complaint j[ 2(b); E. 4; J.A. 6.
King & Spalding was formed in 1885. E. 161; J.A. 153.
At the time the complaint was filed, King & Spalding had
never admitted a woman to partnership throughout its
almost 100-year history. Complaint j[ 2(c); E. 4-5; J.A. 6-7.
Prom 1944 until 1977, however, King & Spalding employed
a woman (Ms. Antha M'ulkey) as the firm’s only “perma
nent associate.”4
Ms. Hishon was only the second female lawyer em
ployed by King & Spalding. She was employed in 1972
following graduation with honors from the Columbia Uni
versity School of Law. Complaint H 5; B. 5; J.A. 7. The
complaint alleged that petitioner was induced to accept
3The district court's jurisdiction was based on 42 U. S. C.
§ 2000e-5(f)(3) and 28 U. S. C. § 1331.
4See listings of King & Spalding (formerly named Spalding,
Sibley & Troutman (Jan. 1943-June 1946), Spalding, Sibley,
Troutman & Kelley (July 1946-1955), and Spalding, Sibley,
Troutman, Meadow & Smith (1956-1961)) in Martindale-Hubbell
Law Directory for the years 1944-1977.
4
employment with King & Spalding by the express promise
and representation that she would be considered for part
nership on a fair, non-discriminatory basis upon satisfac
tory completion of five or six years’ employment as an
associate. Complaint If 8(c), (d ); R. 6; J.A. 9. The com
plaint also alleged that King & Spalding made similar
representations to other promising law school graduates
(complaint f[8; R. 6; J.A. 8) and that such promises and
representations were “terms, conditions and privileges” of
petitioner’s employment by King & Spalding within the
meaning of § 703(a) (1) of Title VII. Complaint W 4,16(a);
R. 5, 8-9; J.A. 7,11.
The complaint alleged that, despite King & Spalding’s
promises and representations of fair and non-discrimina
tory treatment, King & Spalding discriminated against
petitioner on the basis of sex and, in considering her for
promotion to partnership, refused to utilize the same
standards it applied to male associates who were admitted
to partnership. Complaint If 17(h); R. 11; J.A. 13.
The complaint also alleged that petitioner’s employ
ment as an associate was terminated as a result of the sex
discrimination practiced by King & Spalding. Complaint
HU 13, 17(c); R. 8-10; J.A. 10-12. The same discriminatory
decision to refuse to admit petitioner to partnership led
automatically to her dismissal as an associate under the
firm’s “up-or-out” policy. Id.
The Proceedings Below5
The district court imposed a stay on merits discovery
and granted petitioner a limited period within which to
5The Equal Employment Opportunity Commission moved
to participate in the action as amicus curiae, and for access to
the record (J.A. 109-10) which the district court had placed
under seal. R. 90-92; J.A. 87-89. The district court granted the
(Continued on next page)
5
conduct discovery restricted to the “coverage” issue. 678
F. 2d at 1025 (R. 88-89; J.A. 86-87).
In partial response to the petitioner’s discovery re
quests, King & Spalding produced a written partnership
agreement. R. 161-72; J.A. 153-64. The King & Spalding
partnership agreement supersedes the Georgia law of
partnerships and performs the same function as a cor
porate charter by conferring on King & Spalding the prin
cipal attributes of incorporation, including (1) perpetual
existence (ffi[ 2, 5(a); R. 161-62; J.A. 153-54), (2) a trade
name “King & Spalding” wdiich is not the name of any of
its living partners (If 1; R. 161; J.A. 153), (3) centralized
management and control by a committee that is the equiva
lent of a corporate board of directors (|f 14; R. 170-71; J.A.
162-63), and (4) a limitation on each partner’s ownership
interest in the assets of the firm to the amount of his “cap
ital account.” If 9 (a); R. 166-67; J.A. 158-59.
(Continued from previous page)
EEOC's motion to participate, but denied it access to the record.
j.A. 218-19. On appeal, the EEOC again moved for access to
the record and to participate as amicus curiae. J.A. 5. Although
the court of appeals granted the Commission's request to par
ticipate in oral argument, it failed to rule on its motion for ac
cess to the record. J.A. 5.
The Commission's position in this case was succintly stated
in its brief in support of the petitioner's request for rehearing
en banc in the court of appeals:
The EEOC, as the agency charged by Congress to en
force and interpret Title VII, submits that the panel's con
clusion is erroneous, in that it conflicts with the language
and intent of the statute and with relevant Supreme Court
case law and rules of statutory construction. Moreover, the
decision of the panel majority does not simply deprive the
plaintiff in this case of recourse under Title VII. Rather, as
the only appellate decision on this issue, it signals to all
major legal or other professional partnerships that they
may deny equal advancement opportunity to women and
minority associates without fear of retribution under the
statute.
Brief of EEOC, at 2.
6
King & Spalding objected to the majority of peti
tioner’s discovery and, when the petitioner moved to com
pel under Rule 37 of the Federal Rules of Civil Procedure,
the district court denied the motion and simultaneously
dismissed the complaint under Rule 12(b)(1) for want of
subject-matter jurisdiction. The district court ruled that,
accepting petitioner’s allegations of sex discrimination by
King & Spalding as true, such discrimination was outside
the coverage of Title VII because King & Spalding is
organized as a partnership. The district court analogized
a law partnership to a marriage and the application of
Title VII to a shotgun wedding :
In a very real sense a professional partnership
is like a marriage. It is, in fact, nothing less than a
“ business marriage’’ for better or worse. Just as in
marriage different brides bring different qualities in
to the union—some beauty, some money, and some
character—so also in professional partnerships, new
mates or partners are sought and betrothed for dif
ferent reasons and to serve different needs of the
partnership. Some new partners bring legal skills,
others bring clients. Still others bring personality
and negotiating skills. In both, new mates are ex
pected to bring not only ability and industry, but also
moral character, fidelity, trustworthiness, loyalty, per
sonality and love. Unfortunately, however, in part
nerships, as in matrimony, these needed, worthy and
desirable qualities are not necessarily divided evenly
among the applicants according to race, age, sex or
religion, and in some they just are not present at all.
To use or apply Title VII to coerce a mismatched or
unwanted partnership too closely resembles a statute
for the enforcement of shotgun weddings.
25 Empl. Prac. Dec. (CCH) || 31,703, at 20,062 (R.
266; App. A-20).
The trial court refused to look beyond the common-law
definition of partnership and allow petitioner to demon
strate that King & Spalding (as is true of many other law
7
firms) is organized and run in a manner that departs
significantly from the common-law model of a “partner
ship,” and has many attributes of a corporation. Judge
Edenfield stated:
Undeniably, a private professional partnership
is a voluntary association. . . . Plaintiff’s emphasis
on the composition and internal arrangements of this
particular partnership cannot alter this inescapable
conclusion. King & Spalding is a partnership, created
and perpetuated as such and subject to the partner
ship laws of Georgia and the United States. The
legal characterization of what an entity is, of course,
is purely a question of state law,. . .
These observations effectively dispose of plain
tiff’s prayers for further discovery.
Id. (R. 265 ; App. A-19).
In dismissing the complaint, the district court was
heavily influenced by what it perceived as an infringement
of rights of “freedom of association” of King & Spalding’s
existing partners that would result if the firm were sub
jected to the coverage of Title VII and prohibited from
using race, sex and religion as criteria in the selection of
partners. The court saw itself confronted with the “di
lemma” of having to choose between Title VII to cover
partnership decisions of large law firms on the one hand—
a question which the court said was “doubtful and obscure”
—and ruling that Title VII violates “the right of defend
ant to freedom of association” if Title VII were applied
to the selection of partners by King & Spalding from
among its associates. Id. at 20,064 (R. 271; App. A-24).
The court resolved the dilemma by deciding the “doubtful
and obscure” question of coverage of Title VII over law
firm partnerships against the petitioner, but with the ob
servation that “the court is humbly aware that in reach
ing this conclusion it may have erred.” Id.
The district court described its dilemma in the con
cluding paragraph of the opinion:
8
In the end, then, the court faces this dilemma:
(1) If the court finds that the case is covered by
Title VII the defendant’s constitutional right to free
dom of association is then thrown into head-on con
flict with plaintiff’s constitutional right not to suffer
discrimination in the terms, conditions and privileges
of her employment; (2) if the court construes the
Act as not covering plaintiff’s claim, then there is no
constitutional problem and the court should dismiss
the case for want of subject-matter jurisdiction. To
the court, while the right of defendant to freedom of
association seems clear, the coverage of the Act seems
doubtful and obscure. The court is humbly aware
that in reaching this conclusion it may have erred.
In considering this possibility, the court considered a
balancing process which would give effect to both
constitutional rights by allowing the case to proceed
but would require the plaintiff, in such rare instances,
to show by clear and convincing proof that, irrespec
tive of all other justifications claimed by defendant,
naked discrimination was the sole and producing
cause of plaintiff’s rejection as a partner. The court,
however, could find no hint of any authority for a
trial court to so alter the burden of proof. All of
these questions will have to be resolved by a higher
authority, legislative or judicial. In the meantime,
the court concludes that it has no subject-matter
jurisdiction of plaintiff’s claim and the case is, there
fore, DISMISSED.
Id. (E. 271; App. A-24, 25).
On appeal, a divided panel of the Eleventh Circuit
Court of Appeals affirmed, with Circuit Judge Peter T.
Fay and Senior District Judge George C. Young in the
majority, and Circuit Judge Gerald B. Tjoflat dissenting.
Hishon v. King & Spalding, 678 F. 2d 1022 (11th Cir. 1982).
The majority ruled:
A dismissal under Fed. R. Civ. P. 12(b)(1) is
proper only when “ it appears beyond doubt that the
plaintiff can prove no set of facts in support of [her]
claim, which would entitle [her] to relief.” McLain v.
9
Real Estate Board of New Orleans, Inc. . . . Appellant
suggests that Title VII must be given the “ broadest
possible interpretation” in order to effectuate its
purpose—to remedy acts of discrimination within the
employment context. Rogers v. EEOC, 454 F. 2d 234,
238 (5th Cir. 1971), cert, denied, 406 U. S. 957, 92 S.
Ct. 2058, 32 L. Ed. 2d 343 (1972). . . . Even under the
most liberal reading we cannot find the requisite con
gressional intent to permit Title VIPs intervention
into matters of voluntary association. We can con
ceive no set of facts which would entitle her to relief
under Title VII with respect to partnership decisions.
This renders the dismissal of her claim proper.
678 F. 2d at 1026 (App. A-6).
Although the majority refrained from expressly en
dorsing the trial court’s freedom of association rationale,
the majority was heavily influenced by the notion that a
partnership is a “voluntary association,” and that part
ners of a “voluntary association” should be free to select
those with whom they will “associate” in the practice of
law in the absence of clear evidence of “the requisite con
gressional intent to permit Title VIPs intervention into
matters of [discrimination by] voluntary association[s].”
Id.
Judge Tjoflat dissented on the ground that Title VII
applies to petitioner’s firing as an associate as a direct
consequence of King & Spalding’s decision to refuse her
admission to partnership. Since this decision was alleged
to have been based on sex, her firing, therefore, constituted
employment discrimination in violation of §703(a)(1)
and § 703(a) (2) of Title VII. 678 F. 2d at 1030 (App. A-15,
A-16).
Petitioner’s motion for rehearing en banc was denied
on September 9, 1982. App. A-29. Certiorari was granted
by this Court on January 24, 1983. 51 U. S. L. W. 3552.
o-
SUMMARY OF ARGUMENT
The complaint stated a sex discrimination claim under
each of three legal theories. First, the complaint alleged
that the relationship between a partner and a large institu
tional law firm is primarily one of “employment” which
is covered by Title VII. Second, the complaint alleged
that the opportunity of “making partner” which King &
Spalding held out to petitioner and to other associates to
induce them to accept employment with the firm was both
an “employment opportunity” and a “term, condition and
privilege of [her] employment” within the meaning of
§ 703(a) of Title VII. Third, the complaint alleged that
petitioner’s employment as an associate was terminated by
King & Spalding as a direct result of the fact that she had
been rejected for partnership because of her sex.
Because the complaint was dismissed under Rule
12(b) (1) for want of subject-matter jurisdiction, the
judgment must be reversed “unless it appears beyond
doubt that plaintiff can prove no set of facts” under which
sex discrimination in the selection of partners by any law
firm could ever constitute “employment discrimination”
“which would entitle [her] to relief” under Title VII.
McLain v. Real Estate Board of New Orleans, Inc., 444
U. S. 232, 246 (1980).
Partnerships are “persons” whose employment prac
tices are covered by § 701(a) of Title VII. King & Spal
ding employs more than 50 associates and 50 secretarial
and clerical personnel and is engaged in the practice of
law, “an industry affecting commerce” [Ooldfarh v. Vir
ginia State Bar, 421 U. S. 773 (1975)], with offices, in
Atlanta and Washington. King & Spalding is, therefore,
an “employer” covered by Title VII and cannot claim
either a professional exemption [Connecticut v. Teal, 50
U.S.L.W . 4716 (June 21, 1982) (No. 80-2147); Goldfarb
v. Virginia State Bar, 421 U. S. 773 (1975)] or an exemp
tion based on the fact that it is organized as a partnership.
10
11
An associate of a law firm is an “employee” whose
“term[s], condition[s] and privileged] of employment”
and whose “employment opportunities” are protected by
Title VII from discrimination on the basis of race, religion,
sex, or national origin. Kohn v. Royall, Koegel & Wells,
496 F. 2d 1094 (2d Cir. 1974); Lucido v. Cravath, Swaine
& Moore, 425 F. Supp. 123 (S. D. N.Y. 1977); Blank v.
Sullivan & Cromwell, 418 F. Supp. 1 (S. D. N.Y. 1975).
The issue in this case is whether acts of sex discrim
ination practiced by a law firm in refusing to admit female
associates to partnership (and the subsequent discharge
of those associates who do not “make partner” under an
up-or-out policy) constitute “unlawful employment prac
tices” which are prohibited by § 703(a) of Title VII.
In making this determination, it must be remembered
that Title VII was “intended to be broadly inclusive”
{County of Washington v. Gunther, 452 U. S. 161, 178
(1981)], that “Congress required ‘the removal of . . . bar
riers to employment’ and professional development that
had historically been encountered by women, blacks and
other minorities” [Connecticut v. Teal, 50 U.S.L.W. at 4718
(emphasis supplied)], and that Congress, therefore, “in
tended to prohibit all practices in whatever form which
create inequality in employment opportunity due to dis
crimination on the basis of race, religion, sex, or national
origin . . . [as] the ‘highest priority.’ ” Franks v. Bow
man Transportation Co., 424 U. S. 747, 763 (1976) (em
phasis supplied).
In enacting Title VII, Congress rejected the narrow
common-law definition of “employment” in favor of the
more comprehensive and economically realistic definition
of employment in the National Labor Relations Act [NL
RB v. Hearst Publications, 322 U. 8. I l l (1944)], the So
cial Security Act {United States v. Silk, 331 U. S. 704
(1947)], and the Fair Labor Standards Act {Goldberg v.
Whitaker House Cooperative, Inc., 366 U. S. 28 (1961)].
12
The petitioner has advanced two basic arguments to
support her claim that the provisions of Title YII apply
to and were violated by the decision of King & Spalding to
deny her promotion to partnership in the firm on account
of her sex.
Entity Theory—If King & Spalding were organized
as a professional corporation, rather than as a partner
ship, there would be no doubt that its partner-shareholders
would be considered “employees” of the firm for Title VII
purposes. Discrimination by a professional corporation
in the selection of lawyers for advancement from the
“associate” status to that of a “shareholder” is prohibit
ed by Title VII. Cf. Bonilla v. Oakland Scavenger Co.,
697 F. 2d 1297 (9th Cir. 1982).
Although King & Spalding is nominally organized as
a partnership rather than a professional corporation, it
should not be treated differently for Title VII purposes.
Large law partnerships “possess many attributes common
to corporate forms of business.” 678 F. 2d at 1026. In
Beilis v. United States, 417 U. S. 85, 93-94, 95 (1974), this
Court emphasized that “Wall Street law firms . . . are often
large, impersonal, highly structured enterprises of essen
tially perpetual duration” and that even a small law firm
with as few as three partners had “an established insti
tutional identity independent of its individual partners.”
The conclusion that partnerships should be treated
on a parity with corporations for Title VII purposes is
reinforced in this case by the fact that King & Spalding
has a written partnership agreement. This agreement
serves the same function as a corporate charter by elim
inating the common-law rules of partnership and replac
ing them with four principal attributes of incorporation,
including (1) a trade name, (2) perpetual existence, (3)
centralized management, and (4) limited ownership by
partners of firm assets. Cf. Beilis v. United States, 417
IT. S. at 96 n. 4.
The economic reality of the relationship between a
lawyer and a large law firm is primarily one of employ
ment. The professional duties of a lawyer in a large firm
are essentially the same whether the lawyer is a “partner”
or an “associate.” In either case, the lawyer earns a liveli
hood by performing professional services for clients of
the firm. The clients pay the firm for these services and
the lawyer is compensated by the firm.
Although a partner is a nominal “owner” of the firm,
“there is nothing inherently inconsistent between the co
existence between a proprietary and an employment re
lationship.” Goldberg v. Whitaker House Cooperative,
Inc., 366 U. S. at 32. A partner’s income from a law firm
is ordinary income earned as compensation for individual
labors on behalf of the firm and its clients, not as a return
on invested capital. A partner in a law firm cannot, for
example, increase his share of firm profits simply by in
creasing the size of his capital account. Moreover, many
firms, including King & Spalding, limit a partner’s owner
ship in firm assets on retirement or withdrawal to a por
tion of that partner’s capital account.
It is also irrelevant that partnership positions in King
& Spalding are filled by “election” rather than by appoint
ment. EEOC v. First Catholic Slovak Ladies Association,
694 F. 2d 1068 (6th Cir. 1982); Pettway v. American Cast
Iron Pipe Co., 494 F. 2d 211 (5th Cir. 1974).
Employment Opportunity Theory—In addition to al
leging that “partnership” is an employment relationship
covered by Title VII, the complaint also alleged (and the
answer admitted) that King & Spalding represented to
petitioner, and to other young law graduates whom the
firm was seeking to recruit, that each associate would be
fairly considered for partnership after five or six years of
satisfactory employment by the firm. These representa
tions of fair and equal consideration for partnership were
13
14
material inducements to petitioner’s decision to accept
employment as an associate with King <fc Spalding. By
making these representations, King & Spalding made “fair
and equal consideration” for partnership both an employ
ment opportunity and a “term, condition and privilege of
[her] employment” which petitioner possessed by reason
of her employment with King & Spalding as an associate.
“Making partner” represents a promotion from the
entry level position of an “associate” to the more-highly
compensated and prestigious position of a “partner.” Part
nership in a law firm is therefore an employment oppor
tunity.
Partnership in a law firm is also a “term, condition
and privilege” of employment. NLRB v. Bell Aircraft
Corp., 206 F. 2d 235, 237 (2d Cir. 1953) (An employee’s
“prospects for promotion [are] among the conditions of
his employment.”) It makes no difference whether pro
motion would have been to a position that is outside the
coverage of Title VII. Golden State Bottling Co. v. NLRB,
414 U. S. 168, 188 (1973); Lucido v. Cravath, Swaine &
Moore, supra. This is especially true in firms like King
& Spalding that have “up-or-out” policies, which make at
tainment of partnership a condition of continued employ
ment. Only partners are allowed to remain with the firm
and continue working for (i. e., “representing”) clients of
the firm instead of being terminated and forced to look
elsewhere for professional employment.
Assuming arguendo that the relationship between a
junior partner and a large law firm is not an “employment
relationship” that is itself covered by Title VII, the op
portunity of being promoted to partnership which King
& Spalding held out to all of its associates was a “term,
condition or privilege of [the petitioner’s] employment”
within the meaning of '§ 703(a) of Title VII, and also an
“employment opportunity” covered by the Act.
15
Termination Theory — The petitioner has also ad
vanced a third claim of wrongful termination resulting
from King & Spalding’s discriminatory refusal to admit
her to partnership under the firm’s automatic “up-or-out”
policy.
The complaint alleged (and King & Spalding has
admitted) that when King & Spalding refused to ad
mit petitioner to partnership because of her sex, this
decision resulted automatically in the termination of
her employment as an associate under an “up-or-out pol
icy.” The complaint expressly alleged that the petition
er’s employment as an associate was terminated as a direct
result of King & Spalding’s decision to refuse to make her
a partner in the firm, and that sex was a major factor
in its decision. Accepting the allegations of the complaint
as true, the effect of such discrimination was automatically
to terminate Ms. Hishon’s employment as an associate and
to “deprive [her] of employment opportunities or other
wise adversely affect [her] status as an employee” of King
& Spalding, clear violations of § 703(a) of Title VII. Lu-
cido v. Gravath, Swaine S Moore, supra.
The complaint, therefore, stated a claim against King
& Spalding for sex discrimination in employment in viola
tion of Title VII and should not have been dismissed for
want of subject-matter jurisdiction.
---------------- o----------------
ARGUMENT
I. The Refusal to Apply Title VI! to Partnerships Would
Be a Significant Blow to the National Goal of Eradicating Job
Discrimination.
A. Law Partnerships Are Big Business and Represent
Significant Job Opportunities in the Legal Profession.
Partnerships are not outmoded forms of business
enterprises suitable only for cottage industries and small
family businesses. This Court has recognized that “ [s]ome
of the most powerful private institutions in the Nation are
16
conducted in partnership form. Wall Street law firms and
stock brokerage firms provide significant examples.” Beilis
v. United States, 417 U. S. 85, 93-94 (1974).6
Partnerships occupy a significant segment of the
economy and provide a large number of the job opportu
nities in the United States. In 1979, for example, there
were 1,300,000 partnerships in the United States with to
tal revenues of $252.9 billion. U. S. Bureau of the Census,
Statistical Abstract of the United States 1982-83, at 528,
Table 876 (103 ed. 1983) (hereinafter cited as “Statistical
Abstract”).
In 1977, the legal profession was a $14.4 billion indus
try employing 541,000 people; $10.09 billion of the total
was received by 29,200 partnerships which employed 197,-
800 people. Statistical Abstract, 185, 800-01, Tables 311,
1435, 1436. By 1981, the legal profession had grown to a
$23.4 billion industry and employed 684,000 people as
partners, associates and in secretarial and clerical ca
pacities. Statistical Abstract, 800-01, Tables 1435, 1436.
The major law firms in the United States represent
centers of economic and political power far out of propor
tion to their numbers or their contributions to the GNP.
See Beilis v. United States, supra; J. Goulden, The Super-
lawyers (1972); P. Hoffman, Lions in the Street (1973).
King & Spalding’s well-publicized connections during the
Carter Administration were typical of the influence wield
6The Big Eight accounting firms are also organized as part
nerships. In 1981, the largest in terms of number of partners
(Coopers & Lybrand) had 2,010 partners worldwide and rev
enues of $998 million. The smallest of the Big Eight (Arthur
Andersen & Co.) had 1,400 partners and estimated revenues in
excess of $973 million. See Wayne, The Year of the Account
ant, N. Y. Times, Jan. 3,1982, § 3 at 1, col. 2.
17
ed in Washington, and in state capitals throughout the
Nation, by many other large institutional law firms.7
In 1982, the law firms included in the National Law
Journal’s list of the Top 200 law firms employed a total
of 28,836 lawyers as partners (12,153) and associates
(16,683). These firms ranged in size from Chicago’s Bak
er & McKenzie, which had 236 partners and 377 associates,
and operated 28 offices in the United States and in foreign
countries, to Boston’s Herrick & Smith, which had 80 law
yers. The Top 200 Law Firms, National Law Journal,
September 13, 1982, at 14, 16, 18-19; September 20, 1982,
at 13-16. In 1979, King & Spalding ranked 97th, in 1980
106th, in 1981 98th, and 1982 115th among the Top 200 law
firms in total numbers of lawyers. Id .; National Law Jour
nal, October 6, 1980, at 32-37; October 13, 1980, at 34-38.
Furthermore, the Top 200 law firms are big businesses
relative to the size of most other businesses that are cov
ered by Title YU. For example, King & Spalding had
more lawyers in 1980 (102) than 98% of all business “es
tablishments” in the United States had employees.8 King
& Spalding also had more lawyers than 92% of the busi
ness “establishments” in the United States meeting the
7King & Spalding partners Griffin Bell and Jack Watson
served as Attorney General and as Chief of the White House
staff, respectively, during the Carter Administration, while
Charles Kirbo, another King & Spalding partner, served in an
unofficial capacity as "first friend" of the President. The First
Friend, Newsweek, Jan. 24, 1977, at 24 (". . . King & Spalding,
a Southern gentlemanly law firm in Atlanta . . ."). See also
Reuters Ltd., Dateline: Atlanta, June 19, 1979 (". . . King &
Spalding, one of the best connected law firms in the country
. . "King & Spalding, with 107 lawyers, is not the city's
largest firm, but its corporate and social ties are perhaps the
most venerable.").
8U. S. Dept, of Commerce, Bureau of Census, County
Business Patterns— United States, Table 1B— United States—
Establishments, Employees and Payroll by Industry by Employ
m en t-S ize Class: 1977.
18
“size of business” test of Title VII bad employees. Id.
Even if only the number of associates employed by King
& Spalding (50+) is considered, King & Spalding was
still larger than 77% of the business “establishments” in
the United States covered by Title VII. Id.
B. Employment Discrimination Against Women and
Minorities is a Serious Problem in the Legal Profession, Deeply
Rooted in its History.
Discrimination against women, blacks, Jews and other
minorities has been a persistent part of our nation’s his
tory. Despite its motto, “Equal Justice Under Law,” the
legal profession has not been exempt from discrimination.
Although Portia was immortalized by Shakespeare in The
Merchant of Venice, Mr. Justice Bradley, in the Myra
Bradwell case, expressed a less favorable attitude toward
women lawyers that has continued to prevail more than
a century later. In upholding the power of the State of
Illinois to refuse to admit women to the practice of law,
Mr. Justice Bradley stated in a concurring opinion:
[T]he civil law, as well as nature herself, has always
recognized a wide difference in the respective spheres
and destinies of man and woman. Man is, or should
be, woman’s protector and defender. The natural
and proper timidity and delicacy which belongs to the
female sex evidently unfits it for many of the occu
pations of civil life. The constitution of the family
organization, which is founded in the divine ordinance
as well as in the nature of things, indicates the do
mestic sphere as that which properly belongs to the
domain and functions of womanhood. The harmony,
not to say identity, of interests and views which be
long or should belong to the family institution, is re
pugnant to the idea of a woman adopting a distinct
and independent career from that of her husband. . . .
This very incapacity was one circumstance which the
supreme court of Illinois deemed important in ren
dering a married woman incompetent fully to perform
19
the duties and trusts that belong to the office of an
attorney and counselor.
It is true that many women are unmarried and
not affected by any of the duties, complications, and
incapacities arising out of the married state, but
these are exceptions to the general rule. The para
mount destiny and mission of woman are to fulfill
the noble and benign offices of wife and mother. This
is the law of the Creator. And the rules of civil so
ciety must be adapted to the general constitution of
things, and cannot be based upon exceptional cases.
Bradwell v. Illinois, 83 U. S. 130, 141 (1873).
While the legal obstacles to the admission of women
to the bar have been removed, the attitude that women
were “incompetent . . . to perform the duties and trusts
that belong to the office of an attorney” has remained a
formidable obstacle to the advancement of women in the
legal profession. Seventy years after Myra Bradwell,
Judge Phyllis Kravitch, now a member of the Eleventh
Circuit, found large law firms to be closed to women law
yers :
After graduating from the University of Pennsyl
vania Law School in 1943, one of two women in the
class, she was lucky to find a place to practice law—
her father’s firm in Savannah. At the time, most law
firms didn’t hire women—not even good students like
Judge Kravitch, who had been on the editorial board
of the school’s law review. Prestigious judicial clerk
ships were also closed to women then. “ When I
started practicing law,” says Judge Kravitch, “ the
doors were not only closed, they were locked.”
Goolrick, Equality Under the Law?, Atlanta J. &
Const., June 8, 1980 (Atlanta Weekly Magazine), at
16, col. 3.9
9lt is no secret that many of the large law firms throughout
the United States have been historic bastions of overt discrimi
nation in the employment of women, Jews, blacks and other
minorities. See C. Epstein, Women in Law 82 (1981); P. Hoff
man, Lions in the Street 11-12 (1973).
20
As recently as 1950, such prestigious law schools as
Harvard did not admit women. C. Epstein, Women in Law
50 (1981). Notre Dame law school did not admit women
until 1969. Washington and Lee did not do so until 1972.
Id.
Mr, Justice Bradley to the contrary, the objective data
demonstrate that women as a group are as well qualified
as men, intellectually and academically, to practice law.
A 1972 survey of eight leading law schools found that 53%
of the women, and only 35% of the men, enrolled in law
school graduated in the top 10% of their undergraduate
classes. Stevens, Law Schools and Law Students, 59 Ya.
L. Rev. 572 (1973). A study of LSAT scores reflects that
during each year from 1969-73, median LSAT scores of
women were consistently higher than those of their male
counterparts. L. Wightman, Male-Female LSAT Candi
date Study 1969-73, Educational Testing Service (1974).
See also C. Epstein, Women in Law 56-57 (1981); Barber,
Employment Discrimination Against Women Lawyers, 59
A.B.A.J. 1029 (Sept. 1973).
The enactment of Title VII marked a turning point
in the employment of women in the legal profession. In
1964, there were fewer than 2,200 women (4%) enrolled
in accredited law schools. Only 367 women received law
degrees in 1965. Statistical Abstract, 168, Table 279. Ten
years later, the number of women law students had in
creased ten-fold to 21,788 and the number of women receiv
ing law degrees increased by 1200% from 367 in 1965 to
4,415 in 1975. In the next five years from 1975 to 1980,
the number of women graduating from law schools more
than doubled to 10,754. Statistical Abstract, 168, Table
279. By 1981, the number of women studying law had
grown to 44,986 or 35% of the total law school enrollments.
Association of American Law Schools, Prelaw Handbook
1982-83, at 11 (1982).
Despite the objective evidence that women are as well
qualified as men to practice law, the attitude expressed by
Mr. Justice Bradley persists, and lawyers have been slow
to recognize the applicability of Title VII to the legal
profession.10 Although lawyers have long counselled their
clients to comply with Title VII, job opportunities for
women in the legal profession trailed far behind those of
their male counterparts.
Women comprised only 3.8% of the total number of
lawyers and judges employed in 1972, eight years after
the enactment of Title VII. Statistical Abstract, 388,
Table 651. In that year, Ms. Hishon was hired by King
& Spalding as only the second female lawyer in that firm’s
almost 100-year history, and the first since the enactment
of Title VII.
Martindale-Hubbell reflects that the first woman em
ployed by King & Spalding was Ms. Antha Mulkey, an
honor graduate of the University of Georgia Law School,
who was employed as an associate in 1944. Although Ms.
Mulkey was sufficiently well qualified to meet King &
Spalding’s standards for the practice of law—she was em
ployed as an associate for 33 years—she was never ad
mitted to partnership. While she remained as the firm’s
only permanent associate, more than 50 men who were
her juniors were promoted into the partnership.11
10Lawyers were equally slow to recognize the applicability
of the Sherman Act to the legal profession. See Goldfarb v.
Virginia State Bar, 421 U. S. 773 (1975). Cf. Bates v. State Bar
of Arizona, 433 U. S. 350 (1977).
nNot all minority-group members were as fortunate as
Ms. Mulkey. When Morris Abram returned to Atlanta, after
graduating with honors from the University of Georgia and the
University of Chicago Law School, and having earned a Rhodes
Scholarship, he applied to the firm that was then known as
Spalding, Sibley & Troutman and discovered "the awful and
inescapable reality that no Jew had ever been employed by
that firm, now the renowned King & Spalding of Griffin Bell
and Charles Kirbo." M. Abram, The Day is Short 62, 95 (1982).
21
2 2
In 1974 and 1975, the Second Circuit and the Southern
District of New York upheld sex discrimination claims
filed by women lawyers against Wall Street law firms that,
like King & Spalding, were organized as partnerships.
Kohn v. Royall, Koegel & Wells, 496 F. 2d 1094 (2d Cir.
1974); Blank v. Sullivan £ Cromwell, 418 F. Supp. 1 (S. D.
N. Y. 1975). As a result of these decisions, employment
of women as associates by law firms has accelerated. Over
the nine-year period from 1972 through 1981, the number
of women employed in the legal profession as lawyers and
judges increased more than three-fold from 3.8% in 1972
to 14.1%. Statistical Abstract, 388, Table 651.
Although Title VII has expanded the entry-level job
opportunities for women as associates in law firms, the
coveted upper-echelon positions of “partner” in many law
firms remain closed to women or are available only on dis
criminatory terms to the exceptional “Superwoman.” C.
Epstein, Women in Laiv 53 (1981). As recently as 1979,
for example, 90 of the Top 200 law firms (including King
& Spalding) had no women partners; 67 other firms on the
Top 200 list had only one. C. Epstein, Women in Law
175-218 (1981); Epstein, The Partnership Push, SAVVY,
March 1980, at 29, 35.12
A 1982 survey of 151 law firms reflects that there were
no women partners in 32 firms, no black partners in 106,
and no Hispanic partners in 133 firms. Flaherty, Women
£ Minorities: The Gains, National Law Journal, Decem
ber 20, 1982, at 1, 8-11. These 151 law firms employed 5%
of the lawyers in the entire Nation. This same survey
reflects that in June 1982, King & Spalding had only one
woman partner, and no black or Hispanic partners. Al
12This historical pattern of discrimination is by no means
limited to women. One author has noted that there has been
a tendency among Wall Street law firms to hire blacks "only
for display purposes or for corporate 'minority affairs/ /. e.,
contacts with other blacks." C. Clark, Minority Opportunities
in Law for Blacks, Puerto Ricans & Chicanos 5 (1974).
23
though, women represented more than 30% of those grad
uating from law schools in 1980 [Statistical Abstract, 168,
Table 279], only 7 (13%) of King & Spalding’s 53 asso
ciates were women. King & Spalding had only one asso
ciate who was black (2%), and no Hispanic associates.
Id. at 10.
These statistics demonstrate that the issue presented
in this case is not an isolated act of discrimination by a
law firm against a single individual, but is representative
of a historical pattern of discrimination that exists in
large numbers throughout the Country. Although not by
design, this case has become a test case of the rights not
only of women, but also of blacks, Jews and other minor
ities that have historically been excluded from the most
highly compensated, prestigious and responsible job op
portunities in the private practice of law.
The ultimate issue presented by this appeal can be
simply stated:
Can King & Spalding, or any other law firm
that has 15 or more employees, post a sign on
the door of its partnership meetings that reads:
KEEP OUT
NO WOMEN, NO BLACKS, NO JEWS ADMITTED
Petitioner believes that the only answer permitted by
Title VII to this question is an emphatic “NO” and that
the ruling of the court of appeals must be reversed.
IS. Because the Complaint was Dismissed for Want of
Subject-Matter jurisdiction, the judgment Below Must Be Re
versed "Unless it Appears Beyond Doubt that the Plaintiff Can
Prove No Set of Facts in Support of [Her] Claim" that Sex Dis
crimination by Law Firms in the Selection of Partners Is Pro
hibited by Title VII.
In McLain v. Real Estate Board of New Orleans, Inc.,
444 U. S. 232, 246 (1980), this Court held that the same
standards of review apply whether a complaint is dis
24
missed under Rule 12(b)(1) for want of subject-matter
jurisdiction or for failure to state a claim under Rule
12(b)(6). Such dismissals are not favored and must be
reversed “unless ‘it appears beyond doubt that the plain
tiff can prove no set of facts in support of [her] claim
which would entitle [her] to relief.’ ” Id. at 246 (quoting
Conley v. Gibson, 355 TJ. S. 41, 45-46 (1957)).
The judgment below can be affirmed only if there
are no circumstances under which the discrimination by
any law firm that is organized as a partnership in the
selection of partners can be found to be covered by Title
VII. This is especially true in this case, in which the
district court not only sustained a facial attack on the
complaint, but refused to allow petitioner to obtain rele
vant discovery concerning the internal structure and op
eration of King & Spalding to support her claim concern
ing the coverage of Title VII.
The complaint stated a claim for sex discrimination
under Title VII and should not have been dismissed.
III. Discrimination by Law Firms in the Selection of Part
ners and the Discharge of Those Associates who Fail to Make
Partner Because of Sex, Race, Religion, or National Origin, Are
"Unlawful Employment Practices" that Are Prohibited by § 703
(a) (1) and (2) of Title VII.
There is no dispute that King & Spalding is a “per
son” whose employment practices are covered by Title
VII. Section 701(a) expressly defines “the term ‘person’
[to] include . . . partnerships.” Nor is there any doubt
that King & Spalding is an “employer,” is engaged in the
practice of law in “an industry affecting commerce” [see
McLain v. Real Estate Board of New Orleans, Inc., supra;
Goldfarb v. Virginia State Bar, supra], and has “fifteen
or more employees” and, therefore, meets the size of
business test of coverage of Title VII. 42 U. S. C. 12000e
( b ) .
There is no “professional exemption” that removes
lawyers from Title VII, any more than there is a profes
sional exemption from the Sherman Act. Goldfarb v.
Virginia State Bar, supra. An associate of a law firm
(such as Ms. Hishon was of King & Spalding from April
1972 until her discharge on December 31, 1979) is an “em
ployee” of the firm for purposes of Title VII. 42 U. S. C.
§ 2000e(f). Kohn v. Royall, Koegel & Wells, supra; Blank
v. Sullivan & Cromwell, supra; Lucido v. Cravatk, Swaine
& Moore, 425 F. Supp. 123 (S.D. N.Y. 1977).
The question presented by this case is not whether
King & Spalding is an “employer” covered by Title VII,
nor whether Ms. Hishon was an “employee” of King &
Spalding who was entitled to the protection of Title VII.
These points have never been disputed. Rather, the issue
is whether the particular acts of sex discrimination, which
were alleged to have been practiced against Ms. Hishon
by her employer King & Spalding, were “unlawful em
ployment practices” within the meaning of § 703(a) of
Title VII.
As will be explained in Sections C. 1, C. 2, and D be
low, sex discrimination by law firms is an unlawful “em
ployment practice” under each of three legal theories:
(1) A large partnership is an entity having an identity
separate from its individual partners and can be consid
ered an employer of a partner for Title VII purposes;
(2) promotion to partnership is a “term, condition or priv
ilege of employment” or an “employment opportunity;”
and (3) petitioner’s discharge as an associate was the di
rect result of the discriminatory refusal to promote her
to partnership.13
A. Title VII is to be Liberally Construed, and Exceptions
Are Not to be Read into the Statute Without Clear Congres
sional Intent.
25
13Before these three theories are developed in Sections C
and D below, two preliminary points must be made. The first
concerns the construction of Title VII (Section A), and the sec
ond, the definition of "employee" (Section B).
26
This Court has held that “in enacting Title VII of the
Civil Eights Act of 1964, Congress intended to prohibit
all practices in whatever form which create inequality in
employment opportunity due to discrimination on the
basis of race, religion, sex, or national origin, [citations]
and ordained that its policy of outlawing such discrimina
tion should have the ‘highest priority.’ ” Franks v. Bow
man Transportation Co., 424 U. S. 747, 763 (1976). There
is no doubt that Congress intended to outlaw discrimina
tion in the professions. This Court has recently empha
sized that “Congress required ‘the removal of artificial,
arbitrary, and unnecessary barriers to employment’ and
professional development that had historically been en
countered by women, blacks and other minorities.” Con
necticut v. Teal, 50 U.S.L.W. 4716 (June 21, 1982) (No.
80-2147) (emphasis supplied).
This Court has held that “ [w]here Congress explicit
ly enumerates certain exceptions to a general prohibition,
additional exceptions are not to be implied, in the absence
of evidence of a contrary legislative intent.” Andrus v.
Glover Construction Co., 446 U. S. 608, 616-17 (1980);
Continental Casualty Co. v. United States, 314 U. S. 527,
533 (1942).
When Congress has intended to exempt certain or
ganizations from Title VII, it has done so by specific ex
ceptions in the statute. For example, Congress exempted
employers having fewer than fifteen employees ['§ 701(b)],
private clubs [§701(b)(2)], and persons elected to public
office [§ 701(f)] from Title VIPs prohibitions against em
ployment discrimination. There is no evidence, however,
that Congress intended to exempt partnerships in general
or law firms in particular from the coverage of Title VII,
and no such exemptions should be implied.
The approach of the court of appeals to the interpre
tation of Title VII was the opposite of that mandated by
27
the decisions of this Court. Instead of presuming cov
erage from the absence of an express statutory exemption
for law firms, the majority placed the burden on the peti
tioner of demonstrating from the legislative history that
Congress discussed the subject of discrimination by law
firms and other partnerships and specifically intended to
cover jDartnership decisions. Finding an absence of posi
tive evidence of “the requisite congressional intent” [678
F. 2d at 1026 (emphasis supplied)], the lower court pre
sumed that Congress intended to leave discrimination in
the selection of partners by law partnerships and other
“voluntary associations” untouched by Title VIPs other
wise comprehensive prohibitions against discrimination
in the workplace. The lower court disregarded the teach
ing of County of Washington v. Gunther, 452 U. S. 161
(1981), in which this Court explained that, because Title
VII was “intended to be broadly inclusive” [id. at 170],
the lower federal courts “must therefore avoid interpreta
tions of Title VII that deprive victims of discrimination
of a remedy, without clear congressional mandate.” Id.
at 178 (emphasis supplied).
B. Economic Reality and Not Common-Law Definitions
Determines Whether a "Partner" is an "Employee" of the Firm
for Purposes of Title VII.
Title VII defines an “employee” simply as a “person
employed by an employer.” § 701(f) (42 U. S. C. <§ 2000e
(f)). Although the term “employment” is not explicitly
defined in Title VII, it has a well-established common
meaning that encompasses the means by which one earns
a livelihood. Thus, “employment” is defined in Webster’s
Third Neiv International Dictionary 743 (3d ed. 1976), as
an “activity in which one engages and employs his time and
energies . . . [for example] work (as customary trade, craft,
service or vocation) in which one’s labor or services are
paid for by an employer.” (emphasis supplied.) “Employ”
means “to use or engage the services of (a lawyer to
28
straighten out a legal tangle); also: to provide with a job
that pays wages or a salary or with a means of earning
a living.” Id. (emphasis supplied).
It does not demean the legal profession to describe
the practice of law by lawyers for large law firms as
“work” or a “job.” Whether a lawyer is a partner or an
associate in a law firm, the practice of law involves the
performance of personal services of a professional nature
by the individual lawyer. As this Court observed in
Bates v. State Bar of Arizona, it is a “real-life fact that
lawyers earn their livelihood at the bar.” 433 U. S. at
368. In the case of a sole practitioner, the lawyer earns
a livelihood by representing and performing professional
services for individual clients. In the case of a lawyer
who works for a law firm, the lawyer earns a livelihood by
working for clients of the firm, either as a partner or an
associate. The labor by which the lawyer earns a liveli
hood by performing professional services for clients of a
firm is, therefore, well within the common, everyday
meaning of “employment.”
King & Spalding argues that at common law a part
nership and its partners were considered as a single entity.
Based on this premise, King & Spalding would have the
Court conclude that a partner in a large law firm with 50
or even 100 partners—or in the case of a Big Eight ac
counting firm with as many as 2,000 partners'—cannot be
considered as an “employee” of the partnership for pur
poses of Title VII.
Congress did not, however, intend to restrict Title
VII’s otherwise comprehensive ban on employment dis
crimination based on narrow common-law concepts of “em
ployment.” By enacting Title VII without explicit def
initions of “employee” or “employment,” Congress intend
ed to use these terms in the same manner as it had used
them in the National Labor Relations Act, the Social Se-
29
eurity Act, and the Fair Labor Standards Act. In all
three statutes, Congress used the terms “employer,” “em
ployee” and “employment” with only the most general def
initions or without any definitions at all. Congress was
undoubtedly aware, however, that this Court had inter
preted the term “employment” in each of these statutes
very broadly by looking at the economic reality of a par
ticular relationship, and had rejected attempts to narrow
the coverage of those Acts through the use of more re
strictive common-law definitions of an “employee.” NLRB
v. Hearst Publications, 322 U. S. I l l (1944) (National La
bor Eelations Act), United States v. Silk, 331 U. S. 704
(1947) (Social Security Act), and Goldberg v. Whitaker
House Cooperative, Inc., 366 U. S. 28 (1961) (Fair Labor
Standards Act).
In the first of these cases, NLRB v. Hearst Publica
tions, this Court established the rationale that was fol
lowed in subsequent cases in defining the term “employee”
in both the Social Security Act and the Fair Labor Stand
ards Act:
Congress recognized that economic relationships can
not be fitted neatly into the containers designated
“ employee” and “ employer” which an earlier law
had shaped for different purposes . . .
# * *
In this light, the broad language of the Act’s defini
tions, which in terms reject conventional limitations
on such conceptions as “ employee,” “ employer,” and
“ labor dispute,” leaves no doubt that its applicabil
ity is to be determined broadly, in doubtful situations,
by underlying economic facts rather than technically
and exclusively by previously established legal classi
fications.
322 U. S. at 128-29.
Goldberg v. Whitaker House Cooperative [Fair Labor
Standards Act] was decided only three years before the
passage of Title VII. This Court held that an “owner”
30
of an enterprise could also be considered an “employee”
where the economic reality of the relationship was such
that she worked for the enterprise. The Court explained
that “ownership” and “employee” status were not mutual
ly exclusive, and tha t:
There is nothing inherently inconsistent between the
coexistence of a proprietary and an employment re
lationship. If members of a, trade union bought stock
in their corporate employer, they would not cease to
be employees within the conception of this Act. . . .
We fail to see why a member of a cooperative may
not also be an employee of the cooperative. In this
case the members seem to us to be both “ members”
and “ employees.” It is the cooperative that is af
fording them “the opportunity to work, and paying
them for it,” . . .
366 U. S. at 32-33.
This Court has stated that “it is not only appropriate
but also realistic to presume that Congress was thorough
ly familiar with these unusually important precedents from
this and other federal courts and that it expected its en
actment to be interpreted in conformity with them.” Can
non v. University of Chicago, 441 U. 8. 677, 699 (1979).
See also Hargrove v. Ohi Nursery, Inc., 646 F. 2d 716, 720
(2d Cir. 1980) (“Use of the same language in various en
actments dealing with the same general subject matter,
. . . [i. e., employment] is a strong indication that the stat
utes should be interpreted to mean the same thing”).
There can be no doubt, therefore, that in enacting
Title VII, Congress intended that the term “employee” be
interpreted broadly and to reject artificial, common-law
concepts of employment in favor of a realistic appraisal
of the “underlying economic facts” of a particular rela
tionship. NLRB v. Hearst Publications, supra.
C. Discrimination by a Law Firm In the Selection of Part
ners from Among Its Associates Based on Race, Religion, Sex
or National Origin, Violates Title VII.
31
Title VII coverage of sex discrimination practiced
by law firms in the selection of partners from among their
associates exists nnder two distinct legal theories: (1) an
“entity theory” under which the partnership is treated as
the “employer” of its partners, and (2) an “employment
opportunity” theory nnder which to “make partner” is
both an “employment opportunity” and a “term, condition
or privilege” of a young lawyer’s employment as an as
sociate of a large law firm.14
1. The Entity Theory
(a) A large law partnership is an entity that has an institu
tional identity separate from that of its individual partners and
can be considered as the "employer” of a partner for Title VII
purposes.
The crux of King & Spalding’s position in the district
court was that “the firm” and its partners are a single
entity and that a “partner” is an owner and cannot be
separated from “the firm” or considered an “employee”
of “the firm” for purposes of Title VII. These artificial
and legalistic distinctions ignore the economic reality of
the relationship between an individual partner and a large
institutional law firm. A partner, and particularly a junior
partner, in many large law firms is in reality a “profit-shar
ing employee.” City of Wheeling v. Chester, 134 F. 2d
759, 762 (3d Cir. 1943). See Armstrong v. Pliinney, 394
F. 2d 661 (5th Cir. 1968) (applying an entity theory to
hold a partnership to be the “employer” of a 5% partner
for tax purposes).15 Partnership in a law firm has the
primary attributes of employment. Partnership is a job
opportunity which enables a lawyer to earn a living by
performing professional services for firm clients. The
income from the job ends when the partner stops working
14The termination of associates under an up-or-out policy
will be discussed in Section D below.
lsSeveral well-known law firms have "fired” partners. See,
e. g., Bad Day at Kutak Rock, National Law Journal, November
2, 1981 at 1, col. 2.
32
for the firm. Partnership in a law firm is primarily a job
opportunity which is readily distinguishable from real
estate and other investment partnerships which generate
income for partners, not from personal services, but as a
return on invested capital.
The authors of a leading textbook on partnerships
could have been referring to King & Spalding when they
stressed tha t:
[N]o corporation is more entity-like than a large
law or accounting firm which has been going for gen
erations, often under the name of someone long since
dead, with dozens or hundreds of partners (of whom
only a handful, as managing partners or an executive
committee, make major decisions) . . .
J. Crane and A. Bromberg, Law of Partnership 19-20
(1968).
This Court has recognized that “Wall Street law firms
. . . are often large, impersonal, highly structured enter
prises of essentially perpetual duration,” and that even
a small law firm with as few as three partners has “an
established institutional identity independent of its indi
vidual partners.” Beilis v. United States, 417 U. S. at
93-94, 95 (1974) (emphasis supplied). Even the majority
in the court of appeals in this case was “well aware that
large law partnerships possess many attributes common
to corporate forms of business.” 678 F. 2d at 1026.
In Beilis, this Court enforced a grand jury subpoena
which had been served upon a former partner of a small
three-partner law firm requiring his production of records
of the former partnership (which had been dissolved).
This Court rejected Beilis’ assertion of the Fifth Amend
ment privilege against self-incrimination based on his
contention that the law firm and its partners were a single
entity, and that the business records of the partnership
were, therefore, his personal records and protected by the
privilege.
In reaching this conclusion, this Court refused to be
influenced by technical common-law definitions of the rela
tionship between a partnership and its partners. The
Court recognized that the partnership form is, in economic
reality, only one of many forms under which business en
terprises are conducted, and emphasized six common at
tributes of partnerships and corporations which require
that the two organizational forms be treated equally for
Fifth Amendment purposes:
(1) That partnerships, like corporations “ are often large,,
impersonal, highly structured enterprises. . . . ”
(2) That the particular partnership had been in existence
for 15 years and had “ essentially perpetual duration.”
(3) That the partnership had an “ established institution
al identity independent of its individual partners,”
resulting from the fact that, “ [t]he firm maintained
a bank account in the partnership name, had station
ery using the firm name on its letterhead, and, in gen
eral, held itself out to third parties as an entity with
an independent institutional identity . . . ”
(4) That the partnership “ employed six persons in addi
tion to its partners, including two other attorneys
[i. e., ‘associates’] who practiced law on behalf of
the firm, rather than as individuals on their own be
half. ’ ’
(5) That the firm “ filed separate partnership returns for
federal tax purposes, as required by § 6031 of the In
ternal Revenue Code, 26 U. S. C. § 6031. ”
(6) That “ State law permitted the firm to be sued . . . in
the partnership name, and generally regarded the
partnership as a distinct entity for numerous other
purposes.”
Beilis v. United States, 417 U. S. at 93-97 (emphasis
supplied).
These factors apply with much greater force to King
& Spalding than to the dissolved three-man law firm of
Beilis, Kolsby & Wolf. King & Spalding is a “large, im
personal and highly structured enterprise” with more
than 100 lawyers and more than 50 other employees in
33
34
secretarial, paralegal and clerical positions, and offices
in two cities. During the recent past, the ties between
King & Spalding and the Carter Administration were wide
ly publicized, and the firm was recognized as one “of the
most powerful institutions in the Nation.” King & Spald
ing has had, in fact, an “essentially perpetual duration”
that has extended for almost 100 years; King & Spalding
has established for itself an “institutional identity” by
holding itself out to the public as practicing law under a
trade name, “King & Spalding,” which is the name under
which the firm was founded in 1885. R. 161; J.A. 153.
(b) King & Spalding's partnership agreement modifies
state law to give King & Spalding the essential attributes of
incorporation.
A factor present in this case and not present in Beilis
is the fact that King & Spalding operates under a written
partnership agreement that modifies the common law of
partnership and gives King & Spalding the principal at
tributes of incorporation.
A copy of King & Spalding’s partnership agreement
is in the record (R. 161-72; J.A. 153-64) and was relied
on by the petitioner in the district court in support of
her Rule 37 motion to compel discovery. R. 159; J.A. 151.
King & Spalding’s partnership agreement modified the
general principles of partnership law in at least five ma
terial respects, and replaced them with the principal at
tributes of ordinary business corporations. As a result
of these changes, King & Spalding is a “partnership” in
name only, and has all the substantive characteristics of
a corporation.
First—King £ Spalding has a “charter.” While many
law firms function under the common law of partnership
without written agreements, King & Spalding has adopted
a written partnership agreement which modifies the com
mon law and serves the same purposes that a corporate
charter serves for a corporation.
35
In Beilis, this Court treated the three-man law firm
as a corporation for Fifth Amendment purposes, despite
the fact that the firm did not have a written partnership
agreement to serve as “a formal constitution or bylaws
to govern its internal affairs.” 417 U. S. at 96. The Court
stressed, however, that the case for treating the law firm
as a corporation would have been even stronger if the
Beilis firm had operated under a written partnership
agreement that “made any material change in the provi
sions of state law regarding the management and control
of the firm or the rights of the other partners. . . . [That
fact] would merely reinforce our conclusion that the part
nership is properly regarded as an independent entity with
a relatively formal organization.” 417 U. S. at 96 n. 4.
Second — King & Spalding has perpetual existence.
King & Spalding has distinguished itself from a common-
law partnership by providing in its partnership agree
ment that the firm shall have perpetual existence. The
agreement recites that “the Firm” has had a continuing
existence since 1885, and that its existence is not dissolved
by the admission of new partners or the death, withdrawal
or expulsion of any of its partners.
This firm began business January 1, 1885 under
the firm name of King & Spalding . . . and currently
the present firm name.
W W W
(a) The firm shall continue until dissolved by
vote of partners with at least 66-2/3% of the partici
pating units . . . The firm shall not he dissolved by the
withdrawal, incapacity or death of any partner or
partners, . . .
R. 161-62; J.A. 153-54 (emphasis supplied).
In contrast, a common-law partnership is dissolved auto
matically by the addition, withdrawal or death of one of
its partners. O.C.G.A. § 14-8-90 (Ga. Code Ann. § 75-107);
Harwell v. Cowan, 175 Ga. 33 (1), 165 S. E. 2d 19 (1932).
36
Third — King & Spalding does business under a trade
name. King & Spalding is a trade name that does not re
fer to any of its living partners. The adoption of a trade
name has given the firm an institutional identity that is
independent of the individual reputations of the many
well-known lawyers who are presently associated with it.
Use of a trade name protects the goodwill of the firm
against impairment by death and retirement, or the de
fection of any of its well-known partners to other law
firms. Corporations have long recognized the advantages
of trade names. Names like “General Motors” or “Coca-
Cola” have given these enterprises an identity and con
tinuity apart from the names of individuals who founded
them or happened to he their dominant corporate officers
or principal stockholders at any given time. By its delib
erate use of a trade name, the partnership is attempting
to establish and identify itself as the Coca-Cola or General
Motors among law firms in Atlanta, if not nationally.
Fourth — King <& Spalding has centralized manage
ment and control. Management of King & Spalding is
vested in a Management Committee which is elected by the
partners in substantially the same manner as shareholders
of a corporation elect directors. The King & Spalding
Management Committee also performs the same functions
that a board of directors performs in an ordinary business
corporation. While the King & Spalding Management
Committee cannot alter the firm partnership agreement
(any more than the directors of a corporation can amend
its charter), the Management Committee’s actions are
otherwise binding on the firm unless overridden by a
66-2/3 vote of the partners:
The management of the firm shall be delegated
to a Management Committee comprised of three part
ners . . . To the Management Committee the partners
delegate full and complete authority and responsibil
ity to make any and all decisions, commitments and
contracts with respect to the operation and manage
37
ment of the firm, provided, however, the Management
Committee shall not have authority to act in a man
ner which would require a change in this Partnership
Agreement for its accomplishment or implementation.
. . . No action taken by the Management Committee
may be reversed or changed except by an affirmative
vote of partners with 66-2/3% or more of the partici-
pating units.
Partnership Agreement ft 14; R. 170-71; J.A. 162-63
(emphasis supplied).
Under common law, partnership decisions are made
by a vote of a majority at interest of the partners. O.C.G.A.
§ 14-8-42 (Gfa. Code Ann. § 75-203); Rogers v. McDonald,
224 Ga. 599,163 S. E. 2d 719 (1968).
Fifth — King & Spalding partners do not otvn a share
in the Firm assets. When a lawyer becomes a partner in
King & Spalding, he does not acquire a meaningful owner
ship interest in the underlying firm assets, as does a part
ner in a common-law partnership. When a King & Spald
ing partner withdraws or is expelled, he is entitled only
to a refund of his invested capitai, and his share of un
distributed net earnings.16 The King & Spalding agree
ment expressly provides that:
(a) . . . it is agreed that upon the separation
from the firm of any partner, whether by reason of
voluntary or involuntary withdrawal or death, his in
terest in the firm’s earnings and assets shall be as
follows:
(i) A refund of Ms cash capital contribution,
if the firm’s capital is unimpaired (to the extent
there is impairment of the firm’s capital, such
partner shall be refunded only his proportion of
unimpaired capital);
(ii) The amount of undistributed net earn
ings to which he is entitled as shown by the firm’s
16The only circumstance under which a King & Spalding
partner would receive a pro rata share of the underlying assets
of the firm would be in the event of a total dissolution.
8 8
records as of the end of the month in which such
withdrawal occurs.
Partnership Agreement U 9 (a); R. 166-67; J.A. 159.
In contrast, if King & Spalding were a common-law
partnership, a withdrawing partner would be entitled to
receive a pro rata share of the fair market value of the
firm’s net assets in excess of its liabilities. O.C.Gf.A. § 14-
8-45 (Ga. Code Ann. §75-206); Bryan v. Maddox, 249 Gfa.
762, 295 S. E. 2d 60 (1982). This would include a share
of the value of the unbilled time and disbursements, ac
counts receivable, as well as the value of all leasehold
improvements, furniture, fixtures, library, the files, com
puters and other physical assets.
(c) The fact that a partner in King & Spalding may have
a limited "ownership" interest in firm assets or be paid from
"profits" does not alter the primary nature of the relationship
as one of employment.
King & Spalding argued in the lower courts that be
cause partners are considered as the “owners" of the firm,
and are paid from “profits,” they cannot be considered as
“employees” of the firm for purposes of Title VII. Taken
to its logical conclusion, this argument would mean that
employees of a corporation would lose the protection of
Title VII if they acquired stock under an employee stock
ownership plan. This argument is unsound and must be
rejected for at least two reasons.
First, the argument ignores the fact that under the
terms of the King & Spalding partnership agreement a
partner in King & Spalding does not have any meaningful
ownership interest in the underlying firm assets. Partner
ship Agreement if 9(a) (quoted at page 37, supra; R. 166-
67; J.A. 158-59). When a King & Spalding partner retires,
withdraws or is expelled, he is entitled only to a refund
of his invested capital, and his share of undistributed net
earnings. Id.
39
Second, cases decided by this Court [Goldberg v.
Whitaker House Cooperative, Inc., 366 IT. S. 28 (1961)],
as well as by several lower courts [Bonilla v. Oakland
Scavenger Co., 697 F. 2d 1297 (9th Cir. 1982); EEOC v.
First Catholic Slovak Ladies Association, 694 F. 2d 1068
(6th Cir. 1982); Pettway v. American Cast Iron Pipe Co.,
494 F. 2d 211, 264-66 (5th Cir. 1974)] establish that the ex
istence of an ownership interest in a business does not pre
vent a person from being an “employee” of that business
and, therefore, within the protection of federal employ
ment legislation. For example, in Goldberg v. Whitaker
House Cooperative, Inc., this Court held that the women
who worked at home knitting goods for sale by the coopera
tive were “employees” of the cooperative for purposes of
the Fair Labor Standards Act, notwithstanding the fact
that they were also “members” and “owners” of the co
operative. The Court concluded that “ [t]here is no reason
in logic why these members may not be employees. There
is nothing inherently inconsistent between the coexistence
of a proprietary and an employment relationship.” 366
U. S. at 32 (emphasis supplied).
In Bonilla v. Oakland Scavenger Co., supra, the Ninth
Circuit held that a membership corporation engaged in the
garbage business violated Title VII by giving preference
to its stockholders (all of whom were Italian-Americans)
in making promotions from “helper” positions to the high
er-paid positions as “drivers.” The company argued that
Title VII did not apply to the exercise of “proprietary
rights” by stockholders to promote themselves and their
families to higher-paid positions. This argument was re
jected by the Ninth Circuit:
The Company argues that Title VII has no applica
tion to discrimination in the sale of corporate stock.
Even if this is so, however, it does not help the Com
pany’s position here. Since the Company ties pref
erential wages, hours, and job assignments to owner
ship of its stock, the shareholder preference plan con
40
stitutes a condition of employment subject to the
mandate of Title VII. The Company’s organization
closely entangles stock ownership and employment
privilege, but the predominant characteristics are
those of employment. . . . [T]he discriminatory em
ployment practices of the Company are within the
reach of Title VII in spite of the effort to character
ize those practices as “ proprietary rights.”
697 F. 2d at 1302-03.
In Pettway v. American Cast Iron Pipe Co., supra,
the Fifth Circuit held that an opportunity to be elected
to an “ownership” position in a business which was avail
able only to white male employees and gave them the
ability to influence the terms and conditions of their em
ployment was an “employment opportunity” under Title
VII that could not be denied black employees. In that
case, all of the stock of American Cast Iron Pipe Co. had
been conveyed under the will of the company’s founder
jointly to the members of two committees as trustees for
the employees of the company. One committee was called
the Board of Management and consisted of corporate of
ficers of the company. The second committee was called
the Board of Operatives and consisted of white male em
ployees of the company over 21 years of age elected by
non-supervisory employees of the company. The district
court held that, although black employees of the company
were not “employees” of the Board of Operatives, the
opportunity to be elected to serve on the Board of Opera
tives and to influence the management of the company by
voting the shares of stock held by the Board was so con
nected with the employment that black employees could
not be excluded from becoming trustee-owners of the stock
as members of the Board of Operatives. Pettway v. Amer
ican Cast Iron Pipe Co., 332 F. Supp. 811, 815 (N. D. Ala.
1970). Judge Lynne explained that:
“ [T]he right to serve as a member on the Board of
Operatives at Acipco has been, since the inception of
41
the Eagan Plan, a valuable term, condition or priv
ilege of employment at Acipco and therefore falls
within the express coverage of Title VII, 42 U.S.C.A.
2000e-2(a).”
The court of appeals quoted this portion of the district
court’s opinion in affirming the ruling of the district court
insofar as it had held that black employees could not be
denied election to the Board of Operatives, Pettway v.
American Cast Iron Pipe Co., 494 F. 2d at 263-64.
In summary, the factors emphasized by this Court in
Beilis and reinforced by the provisions of the King &
Spalding partnership agreement compel the conclusion
that “the firm” King & Spalding should be treated as an
institution separate from its partners, and as the “em
ployer” of the partners for Title VII purposes. The con
trary ruling of the lower court is erroneous and should
be reversed.
2. The Opportunity Theory
By holding out to petitioner and to other associates the
promise of equal consideration for partnership, King & Spalding
made the opportunity of promotion to partnership a "term,
condition or privilege" of employment and an "employment
opportunity" of its associates that is covered by Title VII.
The complaint alleged that King & Spalding repre
sented to petitioner (and represents generally to other
third-year law students and judicial law clerks whom King
& Spalding is attempting to recruit) that the associate will
be given fair and equal consideration for partnership.
Complaint Tf 8(b), R. 6; J.A. 9-10; Answer If 8(b); R, 26;
J.A. 30-31.17
17The Court can take judicial notice of the fact that there
is vigorous competition among large law firms to employ law
students who are at the top of their classes, as was Ms. Hishon.
Representations such as those made by King & Spalding to pe
titioner are essential for any law firm that hopes to recruit
bright law students or law clerks. No highly-qualified recruit
would accept employment as an associate of even a firm as
prestigious as King & Spalding if the firm did not hold out the
(Continued on next page)
42
Under the allegations of the complaint, the oppor
tunity of promotion to partnership was not one which
King & Spalding held out to the World, but was one which
was specifically offered to petitioner by virtue of her sta
tus as an associate employed by King & Spalding. Assum
ing for the sake of argument that partnership in a law
firm is not, per se, an employment relationship covered by
Title VII, by using the prospect of promotion to partner
ship as an inducement to persuade petitioner and other
bright young lawyers to accept employment with the firm
and to work hard, King & Spalding has made the opportu
nity to become a partner both an “employment opportu
nity” of Ms. Hishon’s and other associates and a “term
condition or privilege of [Ms. Hishon’s] employment” by
King & Spalding as an associate, within the coverage of
§ 703(a) of Title VII, which could not, therefore, be with
held on the basis of sex, race, religion or national origin
under Title VII.
An employee’s “prospects for promotion [are] among
the conditions of his employment.” NLRB v. Bell Aircraft
Corp., 206 P. 2d 235, 237 (2d Cir. 1953). Even the court
of appeals could not “quarrel with the premise that an
‘opportunity’ can include promotion to a position beyond
that of an ‘employee’ covered by Title VII.” 678 F. 2d at
1028.18
Furthermore, in the analogous context of employment
discrimination in violation of the National Labor Rela
tions Act, this Court has held that, when a promotion is
(Continued from previous page)
prospect of admission to partnership as an inducement. See,
e. g v Bower, A Survival Guide For Associates, Barrister, Voi. 6,
No. 1 (Winter 1979), at 17 (" [attainment of partnership status
is a primary motivation for associates. . . .").
18The majority below, however, refused to accept the con
clusion that Title VII prohibited discrimination in the opportu
nity to become a partner in a law firm as "encroaching upon in
dividuals' [partners'] decisions to voluntarily associate in a
business venture." 678 F. 2d at 1028.
43
unlawfully denied to an employee who is covered by that
Act, the protection of the statute is not lost simply because
the position to which the employee would have been pro
moted (but for the employer’s unlawful discrimination)
was a “supervisory position” that is outside the coverage
of the Act. Golden State Bottling Co. v. NLRB, 414 IT.S.
168, 188 (1973). In Golden, an employee w7as denied pro
motion to a supervisory position which was outside the
coverage of the NLRA because of his union activities. This
Court cited with approval the Second Circuit’s decision
in Bell Aircraft and held that the denial of the promotion
based on the employee’s union activities violated the Act,
even though the position in management of the company
was outside the coverage of the Act. The Court quoted
with approval the court of appeals, which had stated:
“ The Act’s remedies are not thwarted by the fact
that an employee who is within the Act’s protections
when the discrimination occurs would have been pro
moted or transferred to a position not covered by
the Act if he had not been discriminated against.
NLRB v. Bell Aircraft Corp., 206 F. 2d 235, 236-237
(2d Cir. 1953).” 467 F. 2d at 166.
414 U. S. at 188.
In Lucido v. Cravath, Swaine $ Moore, supra, the
district court relied upon this reasoning in refusing to dis
miss a Title VII complaint by an associate alleging that
he had been denied admission to partnership because of
his Italian-Catholic ancestry. Without deciding whether
the relationship between partners inter se was covered by
Title VII, the district court held that the opportunity
which Mr. Lucido possessed by virtue of his employment
as an associate by Cravath, Swaine & Moore was an “em
ployment opportunity” that was covered by the Act.
[T]he court need not decide whether Title VII applies
to partners inter se. However, even assuming that
Title VII does not apply to such a relationship, the
44
protection the Act affords to Lucido for the unlawful
discrimination he allegedly suffered as an employee
in not being selected for partner solely because he is
an Italian Catholic would not be affected. The ap
plicability of Title VII might be different if the de
fendant were firing a partner or considering a non-
associate for partner, but, under the facts in the com
plaint, there is a clear employer-employee relation
ship between Crawath and Lucido and discrimination
in a promotional opportunity during that relationship
is covered by Title VII.
The opportunity to be promoted to a position
not itself covered by Title VII does not mean that
discrimination in that promotion cannot be protected
by Title VII.
425 F, Supp. at 128 (emphasis supplied).19
King & Spalding has also made partnership “a con
dition of employment subject to the mandate of Title VII”
by tying both Ms. Hishon’s continued employment by the
I9The opportunity to be considered for partnership is di
rectly affected by the employment opportunities which a young
lawyer receives as an associate. The complaint alleged that be
cause she was a woman, King & Spalding treated Ms. Hishon
less favorably than male associates by giving her less respon
sible work assignments (/. e., "woman's work"), which tended
to involve smaller matters on which she was required to work
alone and without assistance from or being given the oppor
tunity to supervise the work of junior associates. Complaint
If 17(d), (e); R. 9; J.A. 13. This discrimination in the quality of
work assignments deprived petitioner of the opportunity to
demonstrate that she was "partnership material" and tended
to make it less likely that she would advance to partnership
than King & Spalding's male associates who received better,
more responsible work assignments, and plenty of associate
help. These were continuing violations of both § 703(a)(1) (/. e.,
an unlawful discrimination in the "terms, condition or privi
leges of employment because of . . . sex") and § 703(a)(2) (/. e.,
an unlawful segregation or classification of employees that
tended to "deprive [plaintiff] of employment opportunities or
otherwise deliberately affect [her] status as an employee") that
adversely impeded her opportunity to be favorably considered
for partnership. Clark v. Olinkraft, Inc., 556 F. 2d 1219 (5th
Cir. 1977), cert, denied, 434 U. S. 1069 (1978).
45
firm and her advancement to the “preferential wages, hours
and job assignments” to attainment of the coveted status
of a “partner.” Bonilla v. Oakland Scavenger Co., 697 F.
2d at 1302.
The lower court never fully responded to petitioner’s
contention that King & Spalding’s promise of fair con
sideration for partnership became a “term, condition or
privilege” of her employment as an associate. The lower
court conceded that it had “serious concerns about any
representations made to the appellant regarding her fu
ture consideration for partnership” and was “well aware
of the significance given a firm’s partnership policy by a
prospective associate. . . .” 678 F. 2d at 1029. The major
ity suggested, however, that, “ [i]f in fact these represen
tations were deceptively made, then perhaps an action in
breach of contract or misrepresentation may provide a
more appropriate vehicle for the appellant to drive toward
a legal remedy.” Id. The majority never explained how
an express representation of non-diseriminatory consid
eration for partnership could support a contract action by
Ms. Hishon as an employee without the promise becoming
simultaneously a “term, condition or privilege” of her em
ployment by King & Spalding as an associate.
Pettway and a recent decision of the Sixth Circuit in
EEOC v. First Catholic Slovak Ladies Association, supra,
also dispose of another argument that was relied on by
the district court. The district court thought that because
partnership positions in King & Spalding were filled by
“election,” rather than by appointment, they were outside
the coverage of the Act.20 This distinction was rejected
20If this were true, many corporate positions would be out
side the coverage of Title VII. For example, virtually everyone
in a bank from president to assistant cashier is an "officer" and
(Continued on next page)
46
by the Sixth Circuit in First Catholic Slovak Ladies Asso
ciation. Under the constitution of the First Catholic Slo
vak Ladies Association, the salaried officers of the Asso
ciation were also required to be directors. To be eligible
for election as a director, one had to be less than 66 years
old. Relying on the ruling of the Eleventh Circuit in
Hishon, the district court held that the fact of election of
directors removed the positions from the coverage of the
age discrimination act. The Sixth Circuit reversed and
held th a t:
[W]hether an individual is an employee and there
fore covered by the protections in ADEA should not
center on the label which the organization has chosen
to give to the position. By emphasizing that these
women held elected positions as directors and offic
ers, the District Court failed to assess accurately their
true status. These individuals performed traditional
employee duties. . . .
694 F. 2d at 1070.
The teaching of Pettway and First Catholic Slovak
is that when some employees are afforded the opportunity
to be elected “owners” or “shareholders” and to partici
pate in the management of the enterprise, the opportunity
is both an “employment opportunity” and “a term, condi
tion or privilege of employment” to which Title YII ap
plies. The opportunity to be elected cannot be withheld
from other employees on the ground of race, religion, sex,
or national origin.
(Continued from previous page)
is elected by the board of directors; the fact that these positions
are filled by election does not prevent their occupants from
also being "employees" of the bank who are covered by Title
VII. A bank can no more exclude blacks from consideration
for election to the presidency of the bank than it can exclude
them from employment as tellers.
D. King & Spalding's Decision to Deny Plaintiff Admis
sion to Partnership Based on Sex Also Resulted in the Termina
tion of Her Employment as an Associate and thus Violated
§ 703(a)(1) and (2) of the Act.
In addition to the two theories described above, the
complaint also alleged that as a direct consequence of
King & Spalding’s decision to refuse to admit Ms. Hi short
to partnership because of her sex, King & Spalding (a)
froze petitioner’s compensation as an employee of the
firm, and (b) terminated petitioner’s employment as an
associate pursuant to King & Spalding’s admitted “up-or-
out” policy. Complaint 1117(b) (c); B. 10; J.A. 12. This
claim was separate from the “partnership” claims dis
cussed above, and was dismissed by the district court in
a footnote. 25 Empl. Prac. Dec. (CCH) 31,703 at 20,064-
65 n. 1; R. 269; App. A-26.21
The complaint expressly alleged that King & Spald
ing’s decision to refuse petitioner’s admission to partner
ship was based on her sex, and these allegations must be
accepted as true for purposes of the motion to dismiss.
McLain v. Real Estate Board of New Orleans, supra. The
result of the discrimination was, therefore, to “deprive
[Ms. Hishon] of employment opportunities or other-wise
adversely affect [Ms. Plishon’s] status as an employee” of
King & Spalding, a violation of the literal language of
21in its answer and in the brief and affidavits filed in sup
port of its motion to dismiss, King & Spalding admitted that
there was a direct causal connection between King & Spalding's
decision not to admit Ms. Hishon to partnership, and the cessa
tion of all raises for petitioner and her ultimate discharge as an
associate of the firm on December 31, 1979. J.A. 48, 58,
67. In fact, King & Spalding went to some length to em
phasize that it has an "up-or-ouf" policy and no longer em
ploys "permanent associates" as a matter of policy. Id. Thus,
King & Spalding argued that, when the decision was made not
to admit Ms. Hishon to partnership, her raises stopped and her
termination as an associate "within a reasonable period of
time" became automatic, under King & Spalding's established
"up-or-out" policy. Id.
47
48
§ 703(a) (2) of the Act. 42 U. S. C. § 2000e-2(a) (2). See
Lucido v. Gravath, Swaine & Moore, supra.
The district court, however, dismissed this aspect of
plaintiff’s discrimination claim. The court observed that
“this contention will not cut the mustard” because King
& Spalding’s “long-standing [up-or-out] policies . . . have
been uniformly applied by it over the years, for the most
part against associates who were male only [sic, only
male]. Neither in her pleadings, briefs nor arguments
does plaintiff even whisper or suggest that such applica
tions by defendant were in any way based on sex,” 25
Empl. Prac. Dec. (CCH), at 20,064-65 n .l ; R. 269; App.
A-26.
The district court missed the point. The thrust of
the complaint was that plaintiff did not “make partner” at
King & Spalding because she was a woman, and that under
King & Spalding’s established policy this discrimination
also caused both a freeze in her salary advancement as an
associate and her discharge as an associate and employee
of the firm. That some white male associates at King &
Spalding have also been forced to leave the firm when they
did not make partner under the firm’s “up-or-out” policy is
beside the point. Petitioner’s male contemporaries did
not lose their jobs as associates of King & Spalding be
cause they were males, but for other reasons not covered
by Title VII. The complaint alleged that Ms. Hishon lost
her job because of her sex.
The court of appeals also rejected the petitioner’s
claim as a “backdoor” attempt to obtain coverage under
Title VII. The majority stated:
While discriminatory termination alone may have
stated a cause of action under Title VII for an un
lawful discharge, Lucido v. Gravath, Swaine & Moore,
when the termination is a result of the partnership
decision, it loses its separate identity and must fall
49
prey to the same ill-fate as her original attempt to
apply Title VII to partnership decisions.
678 F. 2d at 1029.
The majority relied on an -unprecedented application
of the doctrine of assumption of risk in holding that peti
tioner had no claim under Title VII for wrongful dis
charge :
Prospective associates are apprised not only of
their potential for partnership, but also of the conse
quences to be suffered following an unfavorable de
cision. Just as she accepted a representation made
to her concerning partnership consideration, appel
lant likewise assumed the risk that an unfavorable
decision would set in motion the termination proce
dure under the firm’s “up or out” policy.
678 F. 2d at 1029-30 (emphasis supplied).
Title VII removes discrimination on the basis of race,
sex, religion and national origin from the “risks” which
“employees” must assume as conditions of employment.
Even if petitioner is not entitled to assert a claim under
Title VII for denial of admission to partnership, she is
at least entitled to assert a claim for wrongful discharge
under Title VII based on the theory that King & Spalding!s
decision to refuse her admission to partnership because of
her sex caused her salary as an associate to be frozen and
also resulted in her ultimate discharge as an employee of
the firm, in violation of § 703(a) (2) of the Act.
---------------- o----------------
CONCLUSION
The decision of the court of appeals below expressly
allows large law firms, as well as accounting firms and
other businesses organized as partnerships, to discrimi
nate against women, blacks or religious minorities when
selections are made among the associates for promotion to
partner. The decision below is contrary to the prior de
50
cisions of this Court and represents a significant setback
in the fight against discrimination. The dismissal of the
complaint for failure to state a claim for sex discrimina
tion under Title YII of the Civil Eights Act was erroneous
and should he reversed.
Respectfully submitted,
Emmet J. Bondurant
Edward B. Krugman
OF COUNSEL:
BONDURANT, MILLER, HISHON & STEPHENSON
2200 First Atlanta Tower
Atlanta, Georgia 30383-4501
(404) 688-0350
Attorneys for Petitioner
Elizabeth Anderson Hishon