Contract lawyer sues NYC law firm for not paying overtime

A contract lawyer is suing Labaton Sucharow alleging that the law firm violated federal labor laws by not paying time-and-a-half for overtime.  The contract lawyer, Moshe Koplowitz, said that Labaton Sucharow did not pay him at a higher rate when he worked more than 40 hours in a week.  Koplowitz has been doing contract work for a number of years and is about 10 years out of law school.  A review of the case from the New York Times can be found by clicking here.  There are also some excellent comments to the article.

NYC Posse List members will remember Labaton Sucharow from the large Countrywide class action document review.  Which is kind of interesting since Koplowitz’s suit seeks to become a class action.

We spoke with the lawyer who drafted the complaint, D. Maimon Kirschenbaum, who said that federal law required employees paid by the hour to receive one-and-a-half times their regular pay for every hour over 40 hours worked in a week.  To read the complaint click here.

As we discussed with Kirschenbaum, the cases rests on whether document review constitutes the practice of law.  Under Federal law it hinges on:

§ 541.304 Practice of law or medicine. 

    (a) The term “employee employed in a bona fide professional capacity” in section 13(a)(1) of the Act also shall mean:  (1) Any employee who is the holder of a valid license or certificate permitting the practice of law or medicine or any of their branches and is actually engaged in the practice thereof;

Under state law it hinges on 12 NYCRR § 142-2.14 which reads as follows:

(iii) Professional. Work in a bona fide professional capacity means work by an individual:

(a) whose primary duty consists of the performance of 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, 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

original and creative in character in a recognized field of artistic endeavor (as opposed to work which can be produced by a person endowed with general manual or intellectual ability and training), and the result of which depends primarily on the invention, imagination or talent of the employee; and

(b) whose work requires the consistent exercise of discretion and judgment in its performance; or

(c) whose work is predominantly intellectual and varied in character (as opposed to routine 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.

Tom the Temp has reported on this story and there is a stream of comments on his site that discuss the various issues that may or may not be involved in the case.  For those comments click here.

This all reminds us of the Preston Gates & Ellis case (now K&L Gates LLP and yes — that’s Bill Gates father) where the firm agreed to settle a lawsuit alleging violations of the wage and hour laws. The suit was filed on behalf of over 300 lawyers who were employed by the firm to review electronic documents that were the subject of discovery requests in lawsuits. The gist of the case was that the law firm treated the lawyers as professionals who were exempt from the overtime laws as a result of their professional status, but the lawyers claimed that their work did not require them to use their professional skills, thereby making them nonexempt hourly workers. The settlement reportedly involved a payout of $700,000. The firm denied violating the law and told the media at the time that it would be easier and more cost-effective to settle the case than to fight it.

The reason that lawsuit was important is that it illustrated that even sophisticated employers can find themselves in a costly dispute over whether employees have been properly classified under federal and state wage and hour laws. The suit also illustrates that it is the actual work performed by employees that matters, not the amount of education or training that the employees have or the label that is placed on the work. The issues in the Preston Gates & Ellis case could arise in any workplace with exempt employees, even if they are not professionals. Misclassifying executive or administrative employees could have the same result.

Note to New York Posse List members:  has anyone seen a citation, case or reference that New York law does not recognize document review as the practice of law?  We know this is an issue for out-of-state lawyers trying to waive into New York.  Let us know your experiences and if you can e email us a cite/reference:  manager@theposselist.com.