Last week, a California appeals court ruled that a former law clerk who had graduated from law school but not yet passed the bar, was exempt from overtime pay as a professional employee.  The former law clerk, Matthew Zalesko-Barrett, sued Brayton Purcell LLP alleging that the law firm denied him overtime, waiting time penalties, and rest and meal breaks from August 2007 through June 2009.  Zalesko-Barrett did not contest that he was an exempt employee following his admission the state bar.

California’s Labor Law defines a professional employee as any individual “who is licensed or certified by the State of California and is primarily engaged in the practice of one of the following recognized professions: law, medicine, dentistry, optometry, architecture, engineering, teaching, or accounting.”  An individual can also qualify as a professional employee if he or she performs work requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study.

Zalesko-Barrett admitted that as a law clerk he performed the duties generally required of an attorney such as a drafting pleadings, conducting legal research, and interviewing witnesses. However, Zalesko-Barrett claimed that he was not exempt because the law specifically requires professional employee to be “licensed or certified by the State of California.”  There was no dispute that Zalesko-Barrett did not hold any such license while serving as a law clerk.

The appeals court rejected Zalesko-Barrett’s argument and held that the professional exemption applied to a law school graduate who was not yet licensed to practice law.  The court held that even though Zalesko-Barrett did not hold a license or certification, he performed work requiring a prolonged course of intellectual study.

The decision by the appeals court is interesting in that it disregarded the license/certification requirement under California law, and instead focused on traditional professional employee requirements set forth under federal law.  The decision may also be an indication the law is expanding to recognize/include certain employees as exempt even if they have not met every requirement under a particular regulation.
 

 

Earlier this month, a writer for the legal blog FindLaw, filed a class action lawsuit alleging that Thomson Reuters Corp. and Adecco failed to pay writers for overtime and meal breaks in violation of California state law.  Adecco is a staffing and service agency that hires and assigns workers to Thompson Reuters’ Sunnyvale, California office.

The plaintiff, Jason Beahm, alleges that writers assigned to Thompson Reuters were required to produce a minimum of eight stories a day, and were paid a set amount no matter how many hours were spent to meet this quota.  Counsel for plaintiff has stated that plaintiff’s supervisors “basically told him to put down 40 hours” for each week regardless of the number of hours worked. The case is entitled Beahm v. Adecco, and was filed in the Superior Court of California.

This lawsuit will likely hinge on whether Beahm constitutes a “creative professional” under California’s wage and hour law.  Similar to the Fair Labor Standards Act, California exempts from overtime individuals whose primary duty is the performance of work requiring imagination, originality, or talent in a recognized field of art or creativity.  An employee will not qualify for this exemption if his or her work depends on intelligence, diligence and accuracy rather than creativity.

Typically, writers for newspapers, magazines, and other media are not exempt as “creative professionals” if they only collect, organize and record information that is already public.  For this reason, the Ninth Circuit has held reporters to be non-exempt employees.

In contrast, writers may qualify as “creative professionals” if they analyze or interpret public events, write editorials or opinion columns, or contribute a unique interpretation to a newsworthy event.

Based on the very subjective nature of the “creative professional” exemption, employers should consider taking the advice provided in the federal regulations, and designate writers as exempt or non exempt on a “case by case basis.”  Employers should be aware, however, that there are no points for “style” in these matters.
 

The Eleventh Circuit Court of Appeals court has concluded that a lower court’s dismissal of a collective action filed by accountants was legally proper on the basis that the Company did not misclassify these accountants as exempt.  In an area of wage-hour law that is rife with all manner of shades of gray, this is a great victory for this employer and employers in general.
The case is entitled Bell v. Callaway Partners LLC, in the U.S. Court of appeals for the Eleventh Circuit; the case had been filed in the North District of Georgia.

The opinion recited that “the class of plaintiffs in this lawsuit are highly educated accountants and certified public accountants who, during their employment with Callaway, often made more than $100,000 a year and thus they fall under the overtime exemption.”  The plaintiffs had evidently tried to contend that they were not “salaried” as the federal regulations demand, so it did not matter whether or not they performed “professional duties.”  This would be the only tactic open to them, especially if they were more than “staff accountants” or “junior accountants.”

As a component of their attack on the salary issue, the plaintiffs asserted that the Company paid out bonuses and paid them for work performed on weekends in a manner that transgressed against the salary basis test.  If they succeeded in showing they were not salaried, it would not matter whether they performed professional duties 100% of the time because, by definition, they would be non-exempt.

The plaintiffs charged that they were not paid by a salary basis, as the bonuses they received were reduced if they worked less than eight hours in a single weekday.  However, if they were paid a minimum fixed amount of at least $455 per week, the federal minimum, they are still considered salaried.  The Eleventh Circuit noted this, finding that “because there was a nondeductible minimum weekly salary, Callaway was free to structure any bonus program as it saw fit.”

This is the danger of an attack based on lack of a salary basis—if the employer is wrong, there is no defense and the plaintiff(s) win because it is of no avail or legal relevance that the work performed was “exempt” or “professional.”  The FLSA makes a few minor exceptions to this otherwise inviolate requirement to pay “white collar” employees a salary in order to seek to claim the exemption (i.e. doctors, lawyers), but if employers pay in any method other than a salary, the exemption is automatically lost for the employee or class of employees and then significant liability may result.