New York City is home to some of the largest law firms in the country, who handle some of its most complex, elaborate, and document-intensive cases. A recent 2d Circuit Court of Appeals case could have a dramatic impact on how law firms handle contract attorneys who are engaged in large document review projects. The 2d Circuit decision, as reported recently by the New York Law Journal, could also force “industry-wide changes” regarding which attorney employees are (or are not) doing work constituting the practice of law and, therefore, may (or may not) be exempt from receiving overtime pay under the Fair Labor Standards Act.
The events leading to the lawsuit related to David Lola’s employment as a document review attorney with Tower Legal Staffing, Inc. Lola worked in North Carolina on a project in which Tower had contracted with the New York law firm of Skadden, Arps, Slate, Meagher & Flom, LLP to provide certain document review services as part of a federal product liability case Skadden was litigating in Ohio.
Lola typically worked between 45 and 55 hours per week. Lola received no overtime for the hours he worked in excess of 40 in a week. This lack of overtime pay was the crux of Lola’s lawsuit that accused Tower and Skadden of violating the FLSA.
The FLSA acknowledges several categories of employees to whom employers are not obligated to pay overtime, including licensed attorneys whose work constitutes the practice of law. Tower and Skadden argued that Lola was practicing law when he performed his document review work, making him an exempt employee and not entitled to overtime pay.
‘Services that a Machine could have Provided’
The U.S. District Court for the Southern District of New York agreed with Tower and Skadden, dismissing Lola’s case. On appeal, however, a different outcome emerged. The 2d Circuit explained that the crux of legal practice, as defined by North Carolina law, involves exercising “at least a modicum of independent legal judgment.” This definition was very important, since Lola, in his class-action complaint, alleged that Tower and Skadden maintained such tight control over the document review attorneys that it effectively removed any independent legal judgment from the performance of their jobs. Lola, in essence, alleged that the work he did was something that a machine could have done. If Lola could prove this, he potentially had a basis for his assertion that he was not practicing law, meaning he was not an exempt employee and should have received overtime pay under the FLSA.
In a similar overtime case, US District Judge Ronnie Abrams allowed the lawsuit of a document review attorney, William Henig, to proceed against his employer, Providus New York, LLC, and the law firm of Quinn Emanuel Urquhart & Sullivan, LLP, which was the Providus client for whom Henig performed document review work. Judge Abrams, much like the 2d Circuit in Lola’s case, decided that, if the employee could show that the performance of his job entailed the use of no legal judgment or discretion, he could potentially prove that he was not an exempt employee.
The attorney for both Lola and Henig told the Journal that the Lola decision, “if it is not overturned by the U.S. Supreme Court, is an earthquake for the big New York City law firms. They would be insane not to pay overtime to their contract attorneys doing document review.” Another attorney not involved in either case told the Journal that the decision’s impact could spread beyond just contract attorneys, since some law firms’ associate attorneys perform duties that involve no legal “discretion or control.”
If you believe that your employer has wrongfully denied you overtime pay, contact the New York overtime attorneys at Phillips & Associates. Our diligent attorneys represent the rights of workers in New York City and surrounding areas, including helping employees with claims for violations of overtime rules. We practice at the municipal, state, and federal levels.
To schedule a free and confidential consultation, contact us today online or at (212) 248-7431.
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