Recent CA Decisions Hold that Unlicensed Professionals in Law and Accounting Are Not Entitled to Overtime If Performing Professional Work.

In 1995, I defended an attorney-employer who was sued by his law clerk for overtime pay.  The law clerk won at the hearing before the Labor Commissioner, and my client appealed the case.   The trial judge hearing the case “de novo,” announced his belief that the law clerk was “exempt” from overtime.  The law clerk wisely decided to settle. 

I thought of this old case today as I read a decision of a recent California Court of Appeal decision holding that a law clerk awaiting the bar results is exempt from overtime if performing the usual law clerk duties of preparing pleadings, responding or initiating discovery, and making or opposing motions.  A law clerk of course is not a licensed attorney, and cannot sign pleadings, appear in court, or provide legal advice. 

The case is:  Zelasko-Barrett v. Brayton-Purcell, LLP 2011 DJDAR 12500 (filed Aug. 17, 2011).  [“Barrett”].  In Barrett, the employee/law clerk argued that the “professional” exemption did not apply to him because he was not yet a licensed attorney at the time of performing the allegedly exempt services.  The employer conceded that the law clerk was not licensed as a professional but argued that the exemption applied under Cal. Code Regs. Tit. 8, Sec. 11040(b).  This regulation is a “wage order” promulgated by the California Industrial Wage Commission (IWC).  The wage order has two classes of exempt “professional” employees:  (a) those who are licensed professionals and (b) those who are “primarily engaged in an occupation commonly recognized as a learned or artistic profession.”  It is the second category that won the case for the employer/law firm in the Barrett case. 

The further definition of a “learned profession” found in the wage order is that the work performed must rely on “knowledge of an advanced type in a field or science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study, as distinguished from a general academic education and from an apprenticeship, and from training in the performance of routine mental, manual or physical processes, . . .”   The Court of Appeal affirmed the trial court’s grant of summary judgment for the law firm / employer based on this definition.

In part, the Court followed the decision in Campbell v. Pricewaterhouse Coopers, LLP (E.D.CA 2009) 602 F. Supp.2d 1163, 1172, revd. (2011) 642 F.3d 820. [“Campbell”]  In Campbell, the court held that “attest associates” who were unlicensed assistants to C.P.A.s, were exempt even though not licensed accountants because of the level of study, education, and work they performed.  The Court found the Campbell case reasoning applicable to the work customarily performed by law clerks awaiting their bar results. 

What do the Barrett and Campbell Decisions have to say about paralegals?  Of course, the decisions do not address that question, but the reasoning of the decisions leaves open the question of whether some paralegals performing high level tasks similar to that of a law school graduate performing law clerk duties as did Zelasko-Barrett might also be found to be exempt under subsection (b) of Section 11040.  The actual duties performed, and the discretion accorded in the performance of those duties will likely be a critical part of the analysis.  As the Zelasko-Barrett decision noted, the “subpart (b)” exemption raises numerous questions that will be addressed case by case.  At one part of the Barrett decision, the court noted that other decisions, relying on an opinion letter by the Labor Commissioner, have held that paralegals are not generally exempt because they do not satisfy the academic requirements of “subpart (b)” to qualify as exempt.  I think the question will be addressed by how long the employee studied in a particular paralegal certification program to become a certified paralegal, and the depth and duration of the study, as well as the level of responsibility and sophistication of work expected of the paralegal.  Clear at this point is that supervision of the paralegal’s work by an attorney will not of itself disqualify the paralegal from being classified as exempt.  The paralegal seeking overtime will have to argue that “paralegal school” is not the kind of advanced academic, specialized education, contemplated by either Campbell or Barrett.   The Barrett decision seems to accept the distinction when it distinguishes paralegals from law clerks by noting that law clerks have completed law school. 

In future battles concerning the “learned profession” exemption, the focus will likely be on the employee’s “advanced course of study,” the sophistication of the study, the duration of the study, the specialization of the study” and then the degree of complexity, autonomy, and discretion used by the employee in applying his or her “specialized learning.”