Attorney Lawsuit over Overtime Pay
Professionals often require additional assistance handling time-consuming, but routine, tasks. This is particularly apparent in complex litigation that involves voluminous discovery and document review. Not surprisingly, document review can quickly become one of the more labor-intensive and expensive stages of the case. In order to meet this challenge, many firms will hire temporary attorneys to review the discovery for privilege and scope. Before doing so, query whether these firms consider the overtime implications of the FLSA.
Law firms generally consider document review to be professional work. Thus, document review attorneys ordinarily are not subject to the overtime pay requirement of the Fair Labor Standards Act, which mandates time and one-half pay for employees who work more than 40 hours per week. However, some temporary attorneys are challenging this stance on the grounds that the work is so routine in nature that it does not require professional knowledge and is therefore covered under the FLSA.
In one such lawsuit, the plaintiff filed suit against an international law firm where he was hired as a temporary document review attorney. Even though the attorney worked more than 40 hours per week, the law firm did not pay the attorney FLSA overtime rates. The law firm based its payment under the FLSA’s professional employee exemption to the overtime pay requirement, which excludes certain learned professionals whose work requires advanced knowledge that is intellectual in character.
Nevertheless, the attorney maintained that the specific nature of the document review that he was required to perform for the firm, which involved looking for search terms, was so mundane and routine that it did not require any legal analysis or otherwise qualify as the practice of law. Accordingly, the employee filed an overtime lawsuit against the firm in federal court, arguing that the firm violated the salary requirements of the FLSA. The law firm filed a successful motion to dismiss with the district court. The case was appealed to a three-judge panel of the Second Circuit, which heard oral argument last week.
During argument, the law firm’s counsel maintained, in part, that because the attorney was licensed to practice law, the FLSA did not apply. However, several of the judges challenged this point, noting that professional licensure alone does not meet the professional exemption if the attorney is not actually engaged in the practice of law. If the Second Circuit reverses the trial court’s decision, it could set a precedent that leads many more temporary professional employees to seek coverage under the FLSA.
The issue of exemption in the legal industry is most commonly raised in the context of para professionals. Paralegals perform functions that range from clerical activities through drafting legal documents. The United States Department of Labor consistently advises that paralegals are generally not exempt. The DOL reasons that paralegal work does not require a specialized or advance degree and therefore they do not qualify as exempt learned professionals. However, firms may be able to take advantage of the learned professionals exemption if the paralegal holds an advance degree in another specialized area and is applying that expertise to the legal task at hand. For example, if a law firm hires a doctor to give expert advice on a medical malpractice matter or a products liability matter, that doctor would qualify for exemption.
Firms must carefully consider whether their paralegals and attorneys are actually engaging in a professional practice. Paralegals are almost certainly not exempt employees and therefore must be compensated for overtime hours. When tasks are so routine that they do not require expertise or specialized advanced educational certifications, firms must consider whether they are subject to FLSA wage and hour requirements, regardless of the title the worker holds.