Unlicensed Law Clerk Properly Classified as Exempt

September 1, 2011  |  From HRCalifornia Extra

A California Court of Appeals recently examined whether a law school graduate who is not yet licensed to practice law is an exempt employee or is nonexempt and entitled to overtime. The court ruled that the law clerk met the professional employee exemption. Zelasko-Barrett v. Brayton-Purcell, LLP, No. A130540 (August 17, 2011)

This is the first California court decision to apply and extend the ruling in Campbell v. PricewaterhouseCoopers LLP.

In Campbell, a federal court ruling that unlicensed accountants may be classified as exempt. For more information on Campbell, see Unlicensed Accountants May Be Exempt.

Details of the Lawsuit

Matthew Zelasko-Barrett sued his former law firm for failing to pay him overtime wages and provide other benefits under California law for the time period that he worked as a law clerk. Zelasko-Barrett joined the 180-member law firm located in Novato, California, after he graduated from law school in 2007. He worked as a law clerk there for almost two years before he passed the bar exam in 2009 and became a licensed attorney and an associate at the firm.

While employed as a law clerk, Zelasko-Barrett performed tasks customarily performed by junior attorneys: He drafted court documents and discovery requests, conducted legal research, interviewed witnesses, assisted with deposition preparation and interacted with opposing counsel. He was supervised by a licensed attorney.

Zelasko-Barrett voluntarily left the firm and then sued. His main argument was that he was wrongly classified as an exempt employee under the professional exemption test.

Wage Order 4-2001 provides that a professional employee is exempt from overtime pay if he/she:

  • Is licensed or certified by California state government and primarily engages in the practice of one of the following recognized professions: law, medicine, dentistry, optometry, architecture, engineering, teaching or accounting.
  • Is primarily engaged in an occupation commonly recognized as a learned or artistic profession.

Exempt Classification Contested

Zelasko-Barrett argued that because law is one of the listed professions in the exemption for which licensure is required, he argued that he could not be considered employed in a law-related professional capacity unless he was licensed to practice law. He argued "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 disagreed. The court ruled that though Zelasko-Barrett was not a licensed professional under subsection (a) of the exemption, he was still properly classified as exempt under the learned professional test found in subsection (b) of the exemption. The court ruled 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 the learned professional exemption are met.

The court noted that the Ninth Circuit had recently reached this same conclusion in the Campbell case. The court said that the Ninth Circuit’s interpretation of the wage order "as it applies to unlicensed accountants is fully applicable to law school graduates working in a law firm before becoming licensed to practice law."

To meet the learned profession test, the employer must show that:

  • The employee is primarily engaged in work 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.
  • The work is predominantly intellectual and varied in character (as opposed to mental, manual, mechanical or physical work) and is of such a character that the output produced or the result accomplished cannot be standardized in relation to a given period of time.
  • The employee customarily and regularly exercises discretion and independent judgment in performing these duties.
  • The employee meets the salary test: a monthly salary equivalent to no less than two times the state minimum wage for full-time employment (40 hrs. per week).
  • Zelasko-Barrett argued that he did not exercise discretion and independent judgment under the test because his work was supervised, corrected and approved by the licensed attorney and because he could not give advice or make ultimate client related decisions.

The court rejected this argument, noting that just because Zelasko-Barrett was supervised by a licensed attorney does not mean that he did not "customarily and regularly exercise discretion and independent judgment" under the test. The court noted that some degree of supervision does not mean an employee is nonexempt.

The court noted that while Zelasko-Barrett’s discretion may have been limited, his actual job duties in collecting and assimilating evidence, performing legal research and drafting legal memorandum required the exercise of a significant level of discretion.

Best Practices

  • Review employee classifications to make sure they meet all criteria for exempt employees established under the law.
  • Use HRCalifornia's Exempt/Nonexempt Wizard or one of the five Exempt Analysis Worksheets that best fits your situation.
  • Review training manuals, job descriptions, and policies and procedures to make certain they support your job classifications. Regularly audit employees’ actual job duties to ensure that the employees still meet their classification.
  • Be prepared to submit documentation, such as job descriptions, job procedures and detailed training documents, as evidence. Proper documentation will support an employer’s classification of an employee if a lawsuit is filed.