In a post two weeks ago, I wrote about a pair of ground-breaking law review articles by Professors Meredith Miller and Ann Lipton addressing an issue of growing attention in society at large and in legal circles concerning sex discrimination not only against employees of firms covered by Title VII and related state and local anti-discrimination laws, but also discrimination against owners of closely held firms by their co-owners. Generally speaking, such business owners are not within the protected class of employees covered under anti-discrimination laws.
As I promised in that post, this week I’m pleased to present a new episode of the Business Divorce Roundtable podcast featuring an interview of Professor Miller discussing her article entitled Challenging Gender Discrimination in Closely Held Firms: The Hope and Hazard of Corporate Oppression Doctrine. The article was published last year in Volume 54 of the Indiana Law Review and can be read here.
Professor Miller has law degrees from Brooklyn Law School and Temple University School of Law, clerked for a New York Court of Appeals judge, and in 2006 joined the faculty at Touro Law Center where she teaches contracts, business organizations, and employment law. Twice she’s been honored by her students as Professor of the Year. She also maintains a private practice at Miller Law, PLLC concentrating in business and employment law, appeals, and consulting.
Inspired in part by the Straka case that I wrote about in 2019, in which a New York judge in a judicial dissolution case compelled a buyout of a 25% female shareholder of an accounting firm based in part on her male co-owner’s discriminatory behavior, Professor Miller’s article explores the potential use and limitations of minority shareholder oppression doctrine to address discrimination against female co-owners of closely held businesses.
I encourage you to read the entirety of Professor Miller’s article which includes some of the basics of oppression doctrine and employment discrimination law. Below you’ll find the article’s abstract and a link to the podcast. While you’re at it, check out some of the other 20+ interviews available on the Business Divorce Roundtable available here.
The #MeToo Movement has ushered sexual harassment out of the shadows and thrown a spotlight on the gender pay gap in the workplace. Harassment and unfair treatment have, however, been difficult to extinguish. This has been true for all workers, including partners – those women who are owners in their firms and claim that they have suffered harassment or unfair treatment based on gender. That is because a partner’s lawsuit for discrimination often will suffer an insurmountable hurdle: plaintiff’s status as a partner in the firm means that they may not be considered an “employee” under the relevant employment discrimination statutes. This article discusses an underexplored and underutilized potential alternative in seeking a remedy for discrimination: oppression (or “freeze out”) doctrine in the closely held business. The article begins with a discussion of the current jurisprudence addressing when an owner is an employee for purposes of employment discrimination statutes. It also explores the doctrine of minority shareholder oppression, both as an instrument of enforcing fiduciary obligations and as a statutory mechanism to petition for dissolution or seek other equitable relief. The article then brings these subjects together by discussing how a female owner’s claim of discrimination or harassment fits into existing minority oppression doctrine, and by comparing the substantive requirements of discrimination claims and corporate oppression claims. Ultimately, this article concludes that one of the advantages of oppression doctrine is that it need not be framed in gender-based terms to succeed. Indeed, in discrimination cases it is often very difficult to prove that the employment decisions were “based upon sex,” and oppression doctrine bypasses this requirement. However, this advantage in any individual case may also prove to be a greater overall disadvantage because, without framing the claim in gender-based terms, the broader goals of workplace equality are not advanced.