In Pippins v. KPMG LLP, the Second Circuit Court of Appeals recently upheld a District Court's decision to grant summary judgment dismissing the claims of several entry-level accountants seeking unpaid overtime under the Fair Labor Standards Act ("FLSA").
To be an exempt "learned professional," an
employee's primary duty must be "the performance of work
requiring advanced knowledge in a field of science or learning
customarily acquired by a prolonged course of specialized
intellectual instruction." The work must be predominantly
intellectual in character and require the consistent exercise of
discretion and judgment in a field of science or learning in which
specialized academic training is a standard prerequisite for
entrance into the profession.
The accountants in this case argued that they did not fall within
the learned professional exemption because they received the
training and instruction necessary to perform their job while
working at KPMG and not through a prior course of intellectual
instruction. They further argued that their "low-level,
routine work" did not permit them to consistently exercise
professional judgment.
In an issue of first impression, the Court of Appeals held that
"discretion and judgment" in the context of the
professional exemption should not be interpreted in the same way as
the parallel requirement of "discretion and independent
judgment" in the administrative exemption. The Court of
Appeals clarified that learned professionals "need not
exercise management authority to operate as professionals; what
matters is whether they exercise intellectual judgment within the
domain of their particular expertise." However, for the
administrative exemption, "the standard serves to identify,
from among the many workers whose jobs could generally be
characterized as 'administrative,' those who perform duties
primarily directed towards 'management or general business
operations.'"
The Court of Appeals found that the accountants were learned
professionals exempt from the FLSA's overtime requirements
because: (i) they were employed in a field of science and learning;
(ii) they relied on advanced knowledge customarily acquired by
prolonged specialized instruction; and (iii) their work involved
consistent exercise of professional judgment. The Court of Appeals
further ruled that the fact that the accountants were required to
bring errors to the attention of more senior members did not
undermine a finding that they exercise discretion and
judgment.
Although this decision is specific to entry-level accountants, it
will likely be instructive in future cases. As such, employers
should be aware of these standards when making decisions regarding
the exempt status of job classifications.
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