Will the contract lawyer wage-and-hour suits open up law firms to overtime claims from a wider pool?

(from law360.com)

23 July 2014 – Contract lawyers pursuing wage-and-hour suits claiming the temporary document review work they did for white-shoe firms was to “routine” to qualify as overtime-exempt face an uphill battle, but experts say their bellwether cases could open up law firms to overtime claims from a wider pool of attorneys, such as associates.

A ruling in favor of attorneys who sued Skadden Arps Slate Meagher & Flom LLP and Quinn Emanuel Urquhart & Sullivan LLP, as well as legal staffing companies, for denying them overtime pay would give low-level attorneys precedent to fuel analogous arguments that their duties were too menial to fall outside the coverage of overtime pay requirements.

While attorneys are skeptical that the plaintiffs will succeed in the Skadden Arps or Quinn Emanuel cases, they say a ruling that the plaintiffs’ document review duties weren’t within the Fair Labor Standards Act’s professional exemption could have enormous implications in the legal industry and possibly beyond.

“If the plaintiffs actually succeed, not only are you opening the door for young attorneys to make similar types of arguments, [but] it could also spill into other professions,” said Paul Lopez, chair of Tripp Scott‘s litigation department. “It’s a novel argument and a lot of us are anxious to see what the courts are going to do with these cases.”

Last week, Quinn Emanuel filed an answer in New York federal court that asked for the dismissal of a proposed class and collective action filed by William Henig, an attorney provided through a staffing company to the firm on a contract basis for a brief stint in 2012.

Henig wasn’t exempt from either state or federal overtime pay requirements because of the “extremely routine nature” of his duties, but he didn’t get a premium rate for time worked beyond the 40-hour threshold in a given week, he said in a second amended complaint filed July 3.

David Lola, who is being represented by the same firm as Henig in his suit against Skadden, also cited the “routine nature” of his duties in court papers and added that his work required “no legal analysis whatsoever.”

“The legal services industry has for years been exploiting individuals with law degrees looking for short-term work by hiring them for document review projects that do not in any way resemble the practice of law,” said Lola’s October 2013 first amended complaint.

Whether an attorney’s overtime claim holds water hinges on the exact nature of their duties, and not whether they are working on a contract or on a temporary basis, lawyers said.

The key question is whether “mind-numbing, bottom-of-the-barrel type work” qualifies as attorney work that allows firms to avail themselves of the professional exemption, said Jack Zaremski, president and founder of Hanover Legal Personnel Services Inc.

A first-year associate who reviews documents, works under explicit discretion and doesn’t exercise direction could make the same type of argument that Lola or Henig is pursuing, Lopez said.

“It’s irrelevant whether they’re contract lawyers or whether they’re full-blown attorneys on a potential track to make partner,” Lopez said.

But Hamline University School of Law professor David Larson cautioned that partner-track associates might make poor overtime plaintiffs, because they often have relatively diverse duties meant to prepare them to handle an array of situations that might confront their firm.

Larson added, however, that non-partner-track positions with a more restricted set of duties are not uncommon these days, and that those lawyers might share some common ground with the plaintiffs in the Skadden and Quinn Emanuel cases.

“There’s more of those than there ever were,” Larson said. “They may be in a similar position.”

And while young lawyers may feel leery about potential retaliation and difficulty finding future work if they participate in a wage-and-hour suit, the fact that suits could be brought on a class or collective basis, along with others, may help steel their nerves, Larson added.

Wigdor LLP‘s Doug Wigdor said that success for the Skadden and Quinn Emanuel plaintiffs could push more document review offshore, where U.S. wage laws aren’t a concern.

“There is already is a lot of offshore document review, and to the extent that it becomes more expensive for employers to do document review, there might be an incentive to do even more offshore,” Wigdor said.

Another potential consequence of a win for the plaintiffs is more claims from workers who aren’t in the legal industry but don’t get overtime because of the professional exemption.

To qualify for the learned professional exemption, a worker’s primary duty must be doing work requiring “advanced knowledge” in a “field of science or learning,” according to the U.S. Department of Labor. Those fields include law, medicine, accounting, engineering and teaching, among others, the DOL says.

Zaremski said he felt the plaintiffs’ chances of winning the Skadden and Quinn Emanuel suits were extremely slim, though not outside the realm of possibility. But if it happens, it will invite claims from lawyers and nonlawyers.

“It would certainly open … at a minimum, the door for potential lawsuits to attorneys who are actually on the payroll at firms,” Zaremski said. “It would also open the door to nonattorneys who also fall under the umbrella of the exemption.”