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No license, no problem under California professional exemption

August 18, 2011

What’s good for baby accountants is now, apparently, good for baby lawyers. In its June decision in Campbell v. PwC, the Ninth Circuit held unlicensed accountants might nonetheless fall within California’s professional exemption and not be due any overtime. The California court of appeal recently endorsed and extended the Campbell court’s conclusion, holding that a law clerk who had graduated law school, but not yet been licensed to practice by the state Bar, was professionally exempt.

The case is Zelasko-Barrett v. Brayton-Purcell. In this hyphen-heavy hostility, plaintiff began working for the Brayton-Purcell law firm after he graduated from law school in 2007.  He did not pass the bar exam and become a licensed attorney for two years after that. During this period of legal licensure limbo, the firm classified him as a “Law Clerk II,” an exempt position. His responsibilities included junior attorney-type work like drafting pleadings and discovery, drafting motions, doing legal research, interviewing witnesses, and discussing discovery issues with opposing counsel. Sometime after getting his ticket, plaintiff left the firm for greener pastures.

Shortly thereafter, he sued the firm for overtime wages, meal and rest breaks, and the usual panoply of penalties, professional fees, and other unpleasantries. (Some bring donuts in on their last day at work; others, I guess, bring a summons.) Plaintiff contended that, since he had no law license he could not be an exempt professional attorney. The firm said otherwise, pointing to the amount of discretion plaintiff exercised on the job. The trial court sided with the firm, and tossed the case before trial.

The court of appeal affirmed. The court noted that the California wage orders provide two alternative avenues to professional exempt status: a specific list of “enumerated” professions requiring state licensure (lawyers, accountants, doctors, etc.), and a more general description of “learned or artistic” professions. The latter category focuses more on the nature of the field than on the practitioner’s license — whether it requires graduate-level study, and whether the work is intellectual, non-standardized, and varied (as opposed to routine and mechanical).

Plaintiff argued that the enumerated professionals could not also qualify as “learned or artistic professionals.” As plaintiff put it, “In this instance, the Labor Board has spoken: if you have a license, you are exempt. If you don’t have a license, you are not exempt, at least in that particular area.”

The court of appeal rejected this argument — just as the Ninth Circuit had rejected it in Campbell.

The Ninth Circuit found no ambiguity in the language of the wage order, nor do we. The professional exemption’s language is unambiguous. The exemption plainly allows accountants to fall under subsection (b), subject to meeting the specific requirements of that subsection. As the court pointed out, the wage order states explicitly that a person employed in a professional capacity means any employee who meets all of the requirements of subsection (a) “or” of subsection (b). . . .

Consistent with the decision of the Ninth Circuit, we conclude that the professional exemption applies to a law school graduate performing legal services but not yet licensed to practice law if all of the conditions of subsections (b), (c), and (d) of section 11040, subdivision (1)(A)(3) are satisfied.

The court also confirmed that plaintiff’s work had satisfied those conditions, noting plaintiff’s advanced academic study, the discretion used in his day-to-day work, and the fact that plaintiff’s responsibilities (other than signing pleadings or arguing in court) were substantially the same as those of an admitted junior lawyer.

So what’s the takeaway? There is more than one way to skin this particular cat. Licensed employees in an enumerated profession are easy exempts. Unlicensed employees may be require a bit more complex analysis, but both the Ninth Circuit and California courts agree that they might still qualify.  It just depends on the job’s requirements, responsibilities, and reality.

And it probably wouldn’t hurt for employers to seek some, ahem, professional assistance, at least with the complicated questions, particularly given the plaintiff’s bar’s continued fascination with wage and hour litigation.

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