How to navigate a potential discrimination claim

When a partnership is formed or you bring a new member in, it’s likely that a future discrimination claim – or even the potential risk of one – is not at the forefront of anyone’s mind.

It’s therefore important that potential scenarios are considered from the outset in order to minimise risk. Whether you are retiring, suspending or expelling a partner it’s important to navigate this process with care to avoid legal disputes and liability, as well as damaging relationships with clients and remaining partners/employees of the firm.

When planning to expel, suspend or compulsory retire a partner you must ensure that you:

• Have a clearly drafted Partnership/LLP agreement (“the agreement”) – the agreement should clearly set out the process and considerations of the expulsion, suspension or retirement. Once these have been put in place, it’s essential that they are followed to ensure that any challenge in respect of process is minimised.
• Document all performance concerns – prior to undertaking any action to expel, suspend or retire a partner, you should ensure that all concerns and performance issues are documented and, where required, these concerns should be brought to the attention of the partner in question. Without proper records, any subsequent action may be seen as discriminatory.
• Provide fair notice – this will give the partner an opportunity to respond to any allegations. Again, notice should be documented, along with any allegations.
• Provide sufficient justification – if you don’t have clear and justified reasonings for the expulsion, suspension or retirement, this could leave you open to claims such as bad faith and discrimination.

By understanding these potential pitfalls and ensuring your decisions to retire, suspend or expel a partner are fair, just and lawful, you can minimise the risk of legal challenges whilst also maintaining healthy and productive business environments. If you’re unsure, it’s always best to seek legal advice prior to undertaking any action.

Discrimination claims

Even a well drafted agreement may not protect you against discrimination claims if your actions don’t correspond with the intention of the agreement. It may seem tempting to steam ahead and start the expulsion procedure when a partner/employee has been on long-term sick leave for longer than stipulated within the agreement, but this may be unwise.

Think ahead, how are they? Is there a way you can help them recover their performance? Do they have underlying health conditions which may be affecting their work? Have you made sufficient accommodations/support?

Contrary to common belief, partners are protected under the Equality Act 2010 (“the Act”), this means that characteristics such as age, disability, gender reassignment, marriage and civil partnerships, pregnancy/maternity, race, religion or belief, sex and sexual orientation are all protected under the Act. Although discrimination is regarded as a purposeful act, in many cases discrimination can inadvertently occur without malice, and claims may be made in circumstances where you had the best intentions.

Therefore, it’s important for partnerships to review their arrangements, not only before starting expulsion procedures but periodically to ensure compliance with the Act.

If you find yourself in the midst of a discrimination claim it is important to:

• Review the agreement and relevant policies as this will help identify specific clauses relating to dispute resolution, discrimination and potential expulsion
• Gather information by collecting evidence such as witness statements, documents and any other relevant materials
• Clarify the specific actions or events that are considered discriminatory
• Seek legal advice if you require further clarification from those who specialise in partnership disputes.