Expansion of ADEA Would Be Detrimental to Accounting Profession, AICPA Tells EEOC

July 18, 2013

In a recent letter to members of the Equal Employment Opportunity Commission (EEOC), the American Institute of CPAs (AICPA) expressed concern that a significant expansion of the Age Discrimination in Employment Act (ADEA) would be detrimental to the accounting profession and respectfully requested that the EEOC decline to continue on this path.

In a June 25, 2013 letter from AICPA President and CEO Barry C. Melancon, CPA, CGMA, the Institute wrote, “We do not dispute that hundreds of thousands of non-partner employees are appropriately covered by the ADEA.  However, we believe that accounting firm partners (those who own and control a portion of each firm) are not covered by the ADEA, and we do not believe they should be under consideration, as the possible action contends.  Our position is consistent with – and relies upon – longstanding EEOC policy that presumes that partners are not ‘employees’ for purposes of anti-discrimination laws.  A change that treats accounting firm partners as ‘employees’ would upend the long-established expectations and business reliance interests of the accounting profession.”

The letter explains that “accounting firms have structured their partners’ compensation, capital contributions, buy outs, pensions, agreed-upon retirement dates, deferred compensation, voting rights, benefits, governance, and termination policies in reliance on the specific understandings evidenced by partnership agreements.  The respective firms and their partners have adopted these policies for sound business reasons and have evolved a business model that has thrived and prospered for decades while also serving the public interest. In particular, retirement policy provisions allow for the predictable progression of lesser tenured individuals into the partnership, and facilitate the orderly transition of a firm’s clients from senior partners to junior partners.”

“As the EEOC considers whether to expand the ADEA’s scope, we hope you will maintain the flexibility that allows CPAs to organize themselves and plan their succession as they see fit within the bounds of the existing law,” the letter concluded.