Professional Exemption: Law School Graduates Performing Legal Services are Not Entitled to Overtime

The Appellate Court in Zelasko-Barrett v. Brayton-Purcell (2001 DJDAR 12500) recently upheld a trial court ruling that, although the plaintiff had not yet been licensed to practice law in California, he is nonetheless a law school graduate and performed duties that brought him within the professional exemption for those engaged in a learned profession, thus was not entitled to overtime wages. This is an important case that further defines the professional exemption for those engaged in a learned profession.

Labor Code sections 510 and 512 impose overtime compensation and other requirements on California employers, and authorize the California Industrial Wage Commission (IWC) to establish exemptions from the overtime requirements for executive, administrative and professional employees, "provided that the employee is primarily engaged in the duties that meet the test of the exemption, customarily and regularly exercises discretion and independent judgment in performing those duties, and earns a monthly salary equivalent to no less than two times the state minimum wage for full-time employment." Labor Code section 515.

The applicable IWC Wage Order defines the "professional exemption," as applicable to an employee: "(3)(a) who is licensed or certified by the State of California and is primarily engaged in the practice of one of the following professions: law, medicine, dentistry, optometry, architecture, engineering, teaching or accounting; or (b) who is primarily engaged in an occupation commonly recognized as a learned or artistic profession."

The "learned" professions are described as those 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, as distinguished from a general academic education, and from an apprenticeship and training in the performance of routine mental, manual or physical processes. 29 C.F.R. § 541.301(a) (2001).

In this case, using section (b) of the applicable wage order, the Appellate Court reasoned that the plaintiff fell within the "learned" professional exemption. Brayton argued that the plaintiff performed tasks customarily performed by junior attorneys. Although plaintiff was supervised by a licensed attorney and did not sign his name to pleadings, he drafted pleadings and discovery demands and responses, did legal research, drafted memoranda of points and authorities, interviewed witnesses, and assisted in deposition preparation.

The plaintiff's principle argument was that because "law" is one of the enumerated professions in which licensure is required, he cannot be deemed to have been employed in a law-related professional capacity unless he was licensed to practice law. In defeating this argument, the Appellate Court relied on Campbell v. Pricewaterhouse Coopers, (E.D.CA 2009) 602 F.Supp.2d 1163, which held that the Wage Order states explicitly that a person employed in a professional capacity is any employee who meets all of the requirements in subsection (a) "or" of subsection (b).

The District Court in Campbell v. Pricewaterhouse Coopers noted that the legislative intent behind creating the "learned profession exemption" was added to the Wage Order in 1989 in response to concerns that the "IWC decided that the professional exemption relied too much on credentialism."

This case is a reminder to all employers to properly classify their employees as "exempt" or "non-exempt." To do that, an employer needs to: 1) make sure that all job positions have a defined job description which sets forth the major job duties and responsibilities and 2) that the job duties and responsibilities; of your employees are reviewed on an annual basis to ensure that they are working within their defined job duties, and that they continue to remain properly classified.