Charney v. Sullivan & Cromwell: Morning Newswrap
We’ll get back to the subject of pay raises for law firm associates in a minute. For now, here’s a quick update on the other story that Biglaw is abuzz about: Charney v. Sullivan & Cromwell, the case filed against S&C by associate Aaron Charney, alleging anti-gay discrimination and retaliation.
We’re monitoring coverage of this lawsuit through a news feed. Here are links to, and excerpts from, the latest stories:
1. Maple Grief [TheLawyer.com]
[O]ne charge [in the Charney Complaint] strikes [us] as particularly heinous. And that is that partners at the firm said the prevailing attitude internally was that “S&C considers all Canadians to be irrelevant”.Given that the firm’s M&A lawyers spent most of last year defending Canadian nickel producer Inco on a £9.3bn hostile bid, we would be keen to hear Sullivan’s arguments played out in a tribunal.
2. Fake-Lawyer Jokes Better Than Real-Lawyer Jokes [New York Magazine / Daily Intelligencer]
A very brief mention — but with a shout-out to ATL:
Aaron Charney, the gay associate suing his former firm for discrimination, hasn’t gotten the support he expected from New York’s Lesbian and Gay Law Association. [Above the Law]
3. The Tough Road Ahead in the Lawsuit against S&C for Anti-Gay Discrimination: The Plain Truth about Plaintiffs [FindLaw]
Those of you who have been hungering for a dissection of Aaron Charney’s case by an employment lawyer will appreciate this excellent article. It’s by Professor Scott Moss, who teaches employment discrimination law at Marquette. Before entering academia, he practiced plaintiff-side employment law for several years, at Outten & Golden LLP in New York City.
It’s quite interesting. Highlights and our commentary, after the jump.
Professor Moss begins:
For all the talk of wacky harassment lawsuits and litigation-fearful employers, in practice it turns out it’s amazingly hard to sue one’s employer for discrimination or harassment. That’s my experience as an employment lawyer — and I believe that’s the rude lesson a hotshot young lawyer is learning, having sued his own law firm.
(Hmm… What do the guys at Overlawyered think?)
Some thoughts from Professor Moss on Charney’s “going commando” in this case:
The reason lawyers may be scarce in cases like Charney’s is that they know employment discrimination and harassment cases are no piece of cake. Plaintiffs win less often than in other kinds of lawsuits, and victories usually are underwhelming: winners’ damages awards usually are too low to make litigation a worthwhile investment for a paying client, or for a contingency-fee lawyer….The big-ticket item is lost wages, and here’s the catch: If you’re “just” harassed, and not fired, you typically haven’t lost any wages at all. This may be a key reason S&C put Charney on paid leave. That option avoided starting the clock ticking on the kind of high lost-wages damages award that could attract a top employment lawyer to the case. As a result, Charney had to draft his complaint himself, with mixed results.
Professor Moss agrees with our “not bad for a pro se” assessment of Charney’s complaint:
Charney’s no dummy – he’s an honors Columbia Law School grad. Thus, it’s no surprise that, for the work of an amateur, his complaint is pretty impressive. Unfortunately, though, Charney isn’t an employment lawyer, and it shows. Most of the flaws sound technical, but they truly matter – for the claims that are pled, are those that are litigated (unless the complaint is amended: Hint, hint).For example, Charney claims a “pattern or practice” of discrimination — a term that typically means discrimination against many employees. But the acts the complaint describes show, instead, a great deal of discrimination against Charney alone.
What Charney should have claimed, instead, was a “hostile work environment” that was “discriminatory and retaliatory,” and sufficiently “severe or pervasive” to alter his employment conditions. These are the elements the plaintiff must allege for a basic “harassment”-type claim.
Here’s some analysis of Charney’s future employment prospects:
At some point, Charney will be gone from S&C. In theory, whether he wins or loses his case, the anti-retaliation laws make it illegal for another law firm to decline to hire him because he’d sued – but that and a token won’t get him more than a subway ride.I’ve heard recruiters call an otherwise impressive professional who’s filed a discrimination lawsuit “radioactive.” Firms don’t have to tell an employee why they passed on hiring him, which is one reason failure-to-hire lawsuits are, the statistics show, rarely filed.
This all sounds ugly, but if the case isn’t resolved early, it will get uglier still: The real intrusiveness comes in the discovery and evidence-gathering phase. Most likely, S&C will get Charney’s medical and psychological records (if any). In addition, Charney will most likely get the sensitive personnel file documents of both his peers and his alleged harassers.
Discovery won’t be pleasant for Charney, the allegedly uncouth Eric Krautheimer, or the allegedly diva-licious Alexandra Korry. But it could be a gold mine for law firm gossip-mongers. We can’t wait!
So why would anyone volunteer for this kind of misery? None of the possibilities is a rosy scenario:First, Charney may simply be clueless about the level of ugliness to which this will predictably descend….
Second, Charney may simply want justice at any cost. If he truly was harassed, and did suffer retaliation at S&C – already a severe career setback — then he may figure he has little to lose. He may also be an idealist who wants to protect others against homophobia and the setbacks he has suffered.
Third, as is possible in any such case, Charney may simply have concocted these allegations to extort a settlement or cover up workplace failures.
Which type of plaintiff is Charney: clueless, idealistic, or cynical? That’s the drama of discrimination cases: you rarely can tell at the start.
This ambiguity is reflected in our public opinion poll, asking you whether you support Charney or S&C in this case. (Btw, that poll is still open; you can vote by clicking here.)
We’ll just have to wait and see – or, more likely, never know. That’s because most parties reach confidential settlements requiring silence about both the case and the settlement amount.
Will S&C settle the case? On the one hand, they refused to settle at an earlier point in time, when the public relations spectacle could have been avoided. And they’ve given no indication lately of wanting to settle. So perhaps they’re determined to fight it out.
On the other hand, this whole episode has been rather embarrassing — or, at the very least, rather distracting — for the firm. They may just want it to go away, especially before an ugly discovery process begins. And, of course, statistical probability is on the side of settlement (since upwards of 90 percent of cases get settled).
If you have thoughts on this, please share them in the comments. And feel free to take our poll on how much you think Aaron Charney’s case is worth, which you can access by clicking here. Thanks.
Earlier: Prior ATL coverage of Charney v. Sullivan & Cromwell (scroll down)




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Great piece by Prof. Moss.
"the anti-retaliation laws make it illegal for another law firm to decline to hire him because he’d sued"
Anyone know more detail about how this works?
It's understandable that the legislatures don't want to discourage reporting this stuff, but what if the complaint is flimsy or baseless, or outright false? Can a firm refuse to hire someone who has falsely accused a former employer of discrimination/harassment?
Yes. Just think of another reason.
I mean how does it work legally?
Obviously, in practice, the firm doesn't touch the subject of prior litigation.
I'm surprised no one has raised/discussed the potential for a constructive discharge claim. Not sure how viable it is, but it seems that it should have been included in the complaint.
How old is Prof Moss?? He looks 18.
"Boy wonder" Scott Moss has done it again with an impressive piece of analysis, which follows the thoughts of the employ discrim attorneys in the comments section. It may be a good case, but damages will be difficult. The emotional distress portion will be governed by the applicable caselaw that was posted (and that is the reason why Charney stressed that he sought psych help and had symptoms, which supports an emotional distress claim and therefore possible tax free portion of any award).
Constructive discharge is very difficult to win. See the NYS Court of Appeals (NY's Highest Court) decision here: http://www.courts.state.ny.us/ctapps/decisions/nov06/137opn06.pdf, which is consistent with NY and federal law for New York employers.
Moss overlooked the following: Charney said in an interview with a Canadian TV station (if I recall correctly) that the lawyers that he consulted wanted this case to be handled "quietly."
Yes, 11:59, the "quietly" thing is significant. If he's telling the truth, Charney apparently scared off potential counsel because he was intent on making a lot of noise no matter what.
Also, Moss makes a mistake in that regard -- Charney was put on paid leave AFTER filing his lawsuit, I believe. So yes, Charney has not suffered any lost wages yet, but the paid leave (and consequent continued absence of any lost wages) did not interfere with his ability to attract a lawyer to rep him.
Also, I can think of an easy way for any prospective employer justify refusing to hire Charney in the future -- and for S&C to defeat any additional retaliation claim in the future: Charney's gratuitous disclosure of the S&C partnership agreement, his disclosure of an internal communication regarding the handling of a matter for a client (the Kodak fee email), and his false and disparaging statements in the complaint about non-parties (potentially exposing himself to liability for defamation) all demonstrate a lack of judgment and trustworthiness, as well questionable ethical standards. S&C and/or a prospective future employer would have a strong argument that this provides an independent, and not protected, basis for taking adverse action against him.
Documents in court filings are not subject to the law of defamation.
Being put on leave, albeit paid, can still qualify as retaliation under NYC law, unless S&C puts all complainants on paid leave (which I doubt).
To achoo: You say that he made false and disparaging statements about non-parties. How do you know the statements are false?
No constructive discharge claim; he's still employed, remember?
Sullivan & Cromwell has promoted homosexual associates to partner, so I really do not think they are "anti-gay"
Eh,
The point of constructive discharge is that you don't actually have to be terminated. You may still be employed but with less responsibility, reduced pay, relocation to Siberia, given no meaningful work, no chance for progression, etc...
"the anti-retaliation laws make it illegal for another law firm to decline to hire him because he’d sued"
ROTFLMAO. They don't have to be honest about their reasons. Wow you guys are clueless.
Let's see Scott put his time and money where his mouth is an take Charney as a client. He will not because what he wrote simply does not reflect NYC employment discrimination law.
Retract my comment above. Hopefully in the future I will have enough diligence to actually read Scott Moss's article before coming to conclusions regarding what it says.
The perils of quick 5 minute blog breaks.
Wow, Scott "Doogie" Moss is quite the hottie himself, though perhaps he could do with a visit to Mr. Charney's eyebrow person. I'm impressed with such a distinguished CV for someone so young.
I have no comment regarding the good professor's pink polo shirt.
To Anon 12:28 and anontoday:
I'm no expert, but I'm fairly sure defamatory statements contained in a pleading about a NON-party are not privileged. I could be wrong but, without reviewing the law, it's hard to believe that a plaintiff can make reckless assertions that are injurious to a non-party's reputation without having made any reasonable investigation, especially when the allegations are immaterial to his claim. Also, the allegations are not made on information and belief, but rather flat-out asserted as true.
As for paid leave as an adverse employment action, it's true that being placed on paid leave could constitute a retaliatory act under certain circumstances. But when you put on paid leave someone who has disclosed confidential documents, and is making disparaging comments to the media about your firm, I think as a matter of law the paid leave would be viewed as a reasonable self-protection measure (as well as a measure to protect client confidences) and not as a punishment for filing the lawsuit per se, and that's where the retaliation claim fails.
I know certain allegations in the complaint are false because I have been told by people who know. They are provably false. Charney did not need them to establish the elements of his causes of action, and therefore, whatever the merits of his claims against Krautheimer, Korry, and others, in my opinion it is unconscionable that he named innocent bystanders in a document that he posted all over the internet. He did not need to identify them -- certainly not in the complaint (he could have said "Associate X") -- and he should have been sure he was right before saying what he said.
>perhaps he could do with a visit to Mr. Charney's eyebrow person.
I completely agree. It would seem they already use the same tailor.
Do raises at S&C affect Mr. Charney?