A former EY partner has lost a breach of contract lawsuit after being dismissed due to a physical altercation at a Sydney bar. He argued the incident was unrelated to his professional duties. The ruling reinforces the discretion major professional services firms have to terminate partners when personal behaviour puts the firm’s reputation at risk, even in non-work settings.
The case focused on the conduct of a former senior tax partner who joined EY in 2021. He had previously received a final warning for inappropriate behaviour at a work Christmas party. Later, he became involved in a late-night altercation following a fundraising event. Although he described the incident as minor and unrelated to his role, EY found it did not align with the standards expected of a partner.
Firm leaders expressed concern about reputational risk if the event reached the public, particularly as EY had recently completed a high-profile review of its workplace culture. In that context, they determined dismissal was necessary to safeguard the firm’s interests and public image. Internal discussions highlighted the need for partners to act as role models in both professional and social environments.
The ACT Supreme Court supported EY’s interpretation of its partnership agreement and ruled that the firm acted within its rights. The court concluded that EY was not restricted to evaluating only workplace conduct and could reasonably take into account the reputational impact of personal behaviour. It also remarked that partners are expected to uphold high standards, especially after receiving previous warnings or disciplinary actions.
This ruling suggests that professional service firms under close public and regulatory attention have broad authority in protecting their brand. Although the court did not assess the validity of the assault allegation, it backed EY’s view that the partner’s actions could damage the firm’s standing with clients, staff and regulators.
