Gibson Dunn LLP Must Pay Disputed Retirement Benefits

Wednesday, April 1, 2026

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Gibson Dunn LLP Must Pay Disputed Retirement Benefits

Justices Reject Contention That L.A. Superior Court Judge Had Power Under Employment Agreement to Vacate Arbitration Award Based on Legal Error; Firm Contends Partner Who Defects to Another Firm Forfeits Payments

By Kimber Cooley, associate editor

Gibson, Dunn & Crutcher LLP must pay retirement benefits to a partner who defected to a rival firm, Div. Eight of the Court of Appeal for this district held Monday, rejecting the contention that a contractual provision creates a forfeiture of payments under that circumstance, and another proviso empowers a judge to veto an arbitration award based on legal error.

Justice Matthew A. Scherb authored the unpublished opinion which affirms a judgment by Los Angeles Superior Court Judge Kevin C. Brazile confirming an arbitration award in favor of attorney Mark Perry.

“We affirm the judgment because Gibson Dunn has not asserted the kinds of defects in the arbitration process that courts can rectify.”

Div. Eight also broadened a sealing order granted by Brazile.

Gibson Dunn’s Contention

Gibson Dunn argued in a brief signed by James P. Fogelman and also bearing the names of Katherine V.A. Smith, Shannon Mader and Daniel R. Adler:

“Mark Perry was a partner at Gibson. Dunn & Crutcher LLP for over twenty years. He served on the Firm’s Executive Committee and voted to approve its partnership agreement. He also signed that agreement, along with a separate arbitration agreement. Mr. Perry knew—as every Gibson Dunn partner does—that the partnership agreement creates a significant financial incentive to spend one’s entire legal career at Gibson Dunn, in the form of annual retirement payments. Every Gibson Dunn partner also knows that leaving Gibson Dunn to work for a competitor means forfeiting those payments.

“Mr. Perry was no exception to that rule. He acknowledged in conversations with his financial advisor and fellow partners that he could collect retirement payments only if he retired from practicing law altogether, and that if he resigned from Gibson Dunn, his retirement benefits would go ‘to zero.’…Mr. Perry nevertheless chose to leave Gibson Dunn to work for Weil, Gotshal & Manges LLP, which competes with Gibson Dunn. And in announcing that move in an email to Gibson Dunn’s managing partner, he used some version of the word ‘resign’ five times (including in the subject line) and invoked the provision of the partnership agreement addressing resignations— not retirements.”

A few months later, the brief recites, Perry proclaimed that he had not “resigned,” but had “retired,” and wanted his benefits.

Brazile’s Power

It contended that Brazile did have the power to vacate the arbitrator’s award based on legal error—a power that does not ordinarily exist. The firm contended:

“[P]arties may contract around the usual limitations on judicial review of arbitration awards….The parties here did just that, agreeing that ‘[t]he arbitrator’s authority and jurisdiction shall be limited to determining the dispute in arbitration in conformity with law, to the same extent as if such dispute were to be determined as to liability and remedy by a court without a jury.’ ”

Scherb was unpersuaded. He wrote:

“This language does not suffice. It simply precludes the arbitrator from resolving disputes based on an unmoored sense of justice and equity by requiring adherence to the rule of law….

“More clarity…is needed.”

To circumvent the rule that a judge may not upset an arbitration award based on legal error, he said, the parties would have had to spell out that a judge could capsize an award based on legal error.