Court Of Appeal In San Francisco "Learned Professions" Exemption Applies To Unlicensed Law Clerk Of Bay Area Law Firm

October 7, 2011

By Antonio P. Garcia, Jr., Esq.

In California, professionals such as licensed attorneys are exempt from labor regulations requiring employers to provide benefits such as overtime pay, meal breaks, and rest breaks to employees. Should law clerks--individuals who are unlicensed to practice law but who perform supervised lawyer work--be exempt from those regulations? In Zelasko-Barrett v. Brayton-Purcell, LLP, No. A130540 (Aug. 17, 2011), the California Court of Appeal, First Appellate District ruled that the plaintiff, a law school graduate, was exempt when he was employed as an unlicensed law clerk at the defendant employer, Brayton.

A law clerk's duties could vary depending on the type of organization and the nature of its law practice, but typically she would be given tasks performed by a junior attorney. Such tasks could include conducting legal research on issues, writing research memoranda, drafting discovery requests, interviewing witnesses, and preparing drafts of pleadings. Other tasks could include scheduling court appearances and taking notes at meetings and depositions. Because she would not be licensed to practice law yet, the law clerk would be supervised by a licensed lawyer.

In Zelasko-Barrett, the plaintiff was a law clerk at Brayton for two years after he graduated from law school. During this time, he performed most of the tasks described above, and all under a licensed lawyer's supervision. After he passed the bar exam, the plaintiff resigned and subsequently sued Brayton. He claimed that during his law clerk employment, Brayton owed him overtime pay, waiting penalties, meal breaks, and rest breaks because the firm misclassified him as an exempt employee.

In moving for summary judgment, Brayton argued that the plaintiff's claims were unavailing because he was exempt under the "learned professions" exemption provided by California Industrial Welfare Commission Wage Order No. 4-2001 (codified in California Code of Regulations, Title 8, Section 11040(1)(A)(3)(b)). Under that exemption, an employee "[w]ho is primarily engaged in an occupation commonly recognized as a learned or artistic profession" was not entitled to such benefits as meal breaks, rest breaks, and overtime pay. A learned or artistic profession included one that required

[K]nowledge of an advanced type in a field . . . customarily acquired by a prolonged course of specialized intellectual instruction and study, as distinguished from a general academic education and from an apprenticeship, and from training in the performance of routine mental, manual, or physical processes, or work that is an essential part of or necessarily incident to any of the above work[.]

To come within the learned professions exemption, an employee also must be one who "customarily and regularly exercises discretion and independent judgment in the performance of duties . . . ." Cal. Code Regs., tit. 8, § 11040(1)(A)(3)(c) (2002). In support of its motion, Brayton provided evidence that the plaintiff was classified as a law school graduate clerk, and that his job functions included "propounding and managing discovery" and "using discretion to tailor the facts of Brayton's cases to applicable legal standards and arguments." The trial court agreed with Brayton and granted the summary judgment motion.

The First District affirmed. The appellate court noted that Wage Order No. 4-2001's "enumerated professions" exemption provided that licensed professionals such as lawyers, accountants, and physicians were exempt. 8 Cal. Code Regs., tit. 8, § 11040(1)(A)(3)(a). The plaintiff argued that because law was one of the professions listed in the enumerated professions exemption, and since licensure was required under that provision, he could not be deemed to have been employed in a law-related professional capacity unless he was licensed to practice law.

To support his position, the plaintiff relied upon the federal district court 's decision in Campbell v. PricewaterhouseCoopers, LLP, 602 F. Supp. 2d 1163 (E.D. Cal. 2009), rev'd, 642 F.3d 820 (9th Cir. 2011). The issue in Campbell was whether "attest associates"--unlicensed employees who performed accounting functions--were exempt under the learned professions exemption even though the enumerated professions exemption listed accounting as a profession and required licensure in California. The district court found that 1) the enumerated professions exemption covered accounting; 2) attest associates did not fall under the enumerated professions exemption because they were not licensed; and 3) attest associates did not fall under the learned professions exemption because the sole provision covering accounting was the enumerated professions exemption. The court also found that reading the learned professions exemption to include members in an enumerated profession would render the enumerated professions exemption superfluous.

The First District rejected the plaintiff's argument. The appellate court found that the learned professions exemption framed its application in terms of employees, not entire professions. Consequently, the exemption covered unlicensed professionals employed within the enumerated professions. In addition, the court found that reading the learned professions exemption to include members in an enumerated profession would not render the enumerated professions exemption superfluous because such employees would qualify under either exemption. It merely was easier for an employer to prove an employee's exempt status under the enumerated professions exemption.

The First District also noted that the nature of the plaintiff's work qualified him as a learned professional. In his opposition to the summary judgment motion, the plaintiff made conclusory statements regarding his duties at Brayton. He simply stated that he did not work in a professional capacity, he did not perform exempt tasks, and he was misclassified. The First District found that such statements did not create triable issues of fact to defeat summary judgment.

The plaintiff did state that a licensed attorney supervised him and that he never made "the ultimate decision to craft an argument." Nevertheless, the First District opined that "the existence of such limitations and oversight did not negate the fact that his responsibilities required the exercise of discretion and judgment." The First District was persuaded by the California Labor Commissioner decision Yarnykh v. Brayton Purcell LLP, No. 11-38365CT (Oct. 27, 2010) (finding that plaintiff law school graduate fell within the learned professions exemption because 1) plaintiff obtained advanced level of legal knowledge and not one of general routine manual labor; and 2) plaintiff exercised discretion and independent judgment in preparation for asbestos civil litigation).

Based on its findings, the First District concluded that the learned professions exemption "applies to a law school graduate performing legal services but not yet licensed to practice law[.]"

Zelasko-Barrett reminds employers that if they employ unlicensed professionals such as law clerks, attest associates, or medical interns, then they should delineate carefully the tasks, responsibilities, salaries, and benefits of such employees to prevent claims that they are nonexempt. The nature of the work assigned to an employee is a critical factor in determining whether the employee qualifies under the learned professions exemption. For example, if an unlicensed law school graduate is assigned tasks that are "routine mental, manual, mechanical, or physical work," that do not allow her to exercise independent judgment, or preclude her from using the analytical skills developed in law school, then arguably the law clerk could be deemed a nonexempt employee. Hence, to help employers avoid possible claims against them, employers should reevaluate their employment policies and ensure that their policies are consistent with the First District's decision.