Learned Professionals-Employers Take Care
The Second Circuit Court of Appeals (which covers New York, Vermont, Connecticut and Puerto Rico) recently issued a decision regarding the “professional exemption” that provides both guidance and concern to employers. Young v. Cooper Cameron Corporation considered whether an engineer with no formal education beyond high school could satisfy the “learned professional exemption.”
First, the guidance: The plain language of the regulation requires employees to have certain “advanced knowledge” which is “customarily acquired by a prolonged course of specialized intellectual instruction.” The Court determined that on-the-job training was not sufficient to satisfy the requirement in this case, despite the word “customarily.” While there are rare situations, such as the lawyer who studies under a mentor and then is permitted to take the bar exam, most lawyers customarily go to law school (i.e., partake in a prolonged course of specialized intellectual instruction). Here, no engineer in the position under consideration had a college degree. Furthermore, a bachelor’s degree was not even a requirement of the job. Thus, the Court determined that this engineering position could not qualify for the professional exemption. No one in that position “customarily” had an advanced degree and education. Thus, the plaintiff was entitled to overtime compensation.
Next, the concern: This employee was first offered a non-exempt position and declined, seeking higher wages. The company then offered him a similar engineering position that was considered to be exempt from the overtime requirements that paid a higher wage. The employee accepted—then after three years of employment, claimed that the offer of the second job (with duties virtually identical to the non-exempt position initially offered), was a conscious effort to avoid paying overtime wages. The Court agreed and confirmed the lower court’s finding that the employer’s actions to avoid overtime pay were willful (despite efforts the company had allegedly taken to evaluate the positions), extending the statute of limitations from two to three years (see 29 U.S.C. § 255(a)). Indeed, though the positions might have appeared different on paper, it was determined that what this employee actually did was the same as the lower-level job.
Employers should be mindful of the effect job requirements have on proper job classification for overtime wage purposes, and that a court will look at what employees do—not at what their job description says. The result, as here, could be hefty liability for overtime wages.
