Multi-million dollar settlement in Deloitte age discrimination case
A landmark age discrimination case against Deloitte will be settled out of court according to reports, with the Big Four firm paying out millions to avoid further fall-out over its widely-critisised ‘voluntary’ early retirements.
The Big Four professional services firm will reportedly settle a troubling age discrimination case brought against it by long-time partner Colin Brown, in what the AFR has been told is a multi-million dollar deal. Originally seeking over $3 million in damages, Brown took the firm and former CEO Richard Deutsch to court in August of last year, alleging Deloitte had tried to force him into mandatory retirement at age 62.
The practice of ‘voluntary’ early retirement at Deloitte has come under an increased spotlight over the past few years, with EY scrapping its policy last year and KPMG following suit in April after an eight month review and mounting public scrutiny, including not too subtle pressure from the government. PwC has denied that it has any specified retirement age, although sources have claimed partners are expected to resign at as young as 55.
After spells at Price Waterhouse, Arthur Andersen and EY dating back to 1979, Brown first came to Deloitte as a partner in Moscow in 2006, and following a period with the firm in Mongolia he joined its Australian partnership in 2014. According to the AFR, Brown, now 65, has agreed to leave Deloitte at the end of the month, having made previous claims that his suit had made him a pariah at the firm where he continued to work throughout.
Brown’s was the first case of its kind to be brought against a member of the Big Four in Australia, with obvious concerns for Deloitte and its competitors of both a potential avalanche of action to follow as well as the possibility for a legal precedent to be set which could undermine the firms’ entire business and partnership models. The recent developments alone could throw succession planning and talent recruitment and retention into disarray.
Despite the settlement, and admitting that its partners are indeed expected to retire at aged 62, Deloitte has maintained that it hasn’t breached the Age Discrimination Act as the departures remained voluntary regardless of expectations. Still, partners would be brought in for ‘discussions’ in the months leading up to their 62nd birthdays, and it's the contents of these documents which may have tipped Deloitte toward settling out of court.
Brown had sought disclosure on other partnership retirements during his time at the firm that had occurred close to the age of 62, with the federal court in April ordering Deloitte to hand over all communications. Those documents, covering discussions with a further 29 former Deloitte partners, were due to be submitted in the coming weeks; on top of everything else, a potential public relations debacle the Big Four firm may have chosen to avoid.
