On Monday, a federal judge in New York dismissed a proposed FLSA collective action filed by an hourly temp attorney on the grounds that the temp was exempt from the FLSA’s overtime requirements. In a decision that might not sit well with basketball star Allen Iverson, who once chided the media for “talking about practice,” Judge Richard J. Sullivan of the Southern District of New York offered a detailed analysis of what it means to “practice” law, as the applicable exemption requires, and found that even a temp relegated to document review fits the mold.
The case was filed by David Lola, an attorney residing in North Carolina and licensed to practice law in California, against his former employer, Tower Legal Staffing, and a law firm it contracted with, Skadden Arps. As an employee of Tower, Lola was assigned to a doc review project for a large case in Ohio being handled by Skadden. He had standard doc review duties: reviewing documents for predetermined keywords; placing them into preset categories; redacting based on protocols. He was paid $25 per hour and allegedly worked 45 to 55 hours a week.
Lola filed suit under the FLSA seeking overtime pay for himself as well as all others who worked on the same project. Rather than answering Lola’s allegations, the defendants moved to dismiss the case, arguing that Lola fell within the overtime exemption for professionals. Among other professionals, that exemption applies to any lawyer who is (i) “the holder of a valid license … permitting the practice of law,” and (ii) “actually engaged in the practice thereof.” Unlike under other hotly-litigated exemptions, a lawyer need not be salaried for the exemption to apply.
Agreeing with the defendants, Judge Sullivan found that Lola was exempt as a matter of law and dismissed the case. There was no question, the court explained, that Lola held a law license. Instead, the analysis turned on whether he was “engaged in the practice [of law].” Similar to the accountants we reported on in July who unsuccessfully argued to the Second Circuit that they were not exempt, like other accountants, because they performed only entry-level accounting duties, Lola claimed he was not engaged in the practice of law because his doc review work was “mechanical” and “did not involve the use of any legal judgment or discretion.”
The court proceeded through a four-step analysis to determine that Lola was engaged in the practice of law and therefore exempt:
- The phrase “engaged in the practice of law” is not defined by federal statute or regulation.
- Although interpreting the phrase is a federal matter, given that it arises from a federal overtime exemption, the meaning of the phrase should be determined under state law, given that the practice of law is state-regulated and can mean different things in different states.
- To determine what the phrase “engaged in the practice of law” means in this case, North Carolina law applies. While there are competing arguments for California (where Lola was licensed), Ohio (where Skadden’s case was pending), or New York (where the defendants were based), North Carolina prevails because that is where Lola performed the work at issue.
- Based on North Carolina statutes as well as a North Carolina State Bar ethics opinion, someone like Lola who performs doc review, whether “mechanical” or otherwise, is engaged in the practice of law.
Judge Sullivan’s decision is important for a number of reasons. First, Judge Sullivan’s detailed analysis of what it means to practice law should prove relevant and beneficial to firms that employ licensed temp attorneys to perform legal tasks. Second, the decision continues a trend in the Second Circuit of using a by-the-book reading of the FLSA’s exemptions to assess the claims of professionals who allege that their duties are too mechanical or low-level to be exempt. And third, at a time when FLSA lawsuits have a reputation for being fact-sensitive and drawn out, the decision shows that an early dismissal on the merits is attainable under the right circumstances.