In Campbell, et al. v. PricewaterhouseCoopers LLP, the Ninth Circuit reversed the district court's entry of summary judgment against PwC and remanded the case to the district court for trial, holding that PwC had established "material fact questions" regarding whether its unlicensed associate accountants are eligible for exemption from California overtime requirements.
In a strongly worded opinion, the Ninth Circuit found that the district court erred in holding that unlicensed accountants are, as a matter of law, categorically ineligible for exemption from overtime under California's Professional Exemption because they do not hold California CPA licenses. The court explained that the language of the Professional Exemption unambiguously allows such employees to qualify as exempt from overtime under the exemption's "Learned Professional" prong—regardless of their licensure status—provided that they make the requisite factual showings relating to their job duties and other factors. Notably, the court observed that the district court's decision, if upheld, would have had "significantly troubling" results, not just for the accounting profession, but also for the professions of law, medicine, engineering, architecture, optometry, dentistry and teaching in California. Indeed, as the court explained, the district court's rule would have had the perverse effect of requiring the payment of overtime to, for example, recent medical school graduates working as interns, and first-year law firm associates waiting for their bar exam results. Such results were clearly unintended and compelled reversal.
As to the district court's Administrative Exemption ruling, the Ninth Circuit held that the district court erred in finding that PwC's unlicensed associate accountants did not work under "only general supervision," as required by the exemption. The court found that the district court applied a definition of "only general supervision" that had no basis in law, and that the district court otherwise "barely analyzed the evidence" in concluding that PwC's associates failed to meet the "only general supervision" requirement. The court further observed that in any event, the wealth of evidence submitted by PwC on this issue precluded summary judgment and implicated questions that only a jury should decide.
The Ninth Circuit's decision is a favorable one for California employers with regard to the scope of the professional and administrative exemptions, and—given the court's focus on the need to examine individual employees' actual job duties—for purposes of attempting to defeat class certification.