In the present economy where law firms and legal departments are under increasing pressure to lower costs, the classification of full time employees as exempt to avoid overtime pay can become problematic. Law firm paralegals have recently gained class action status in two Fair Labor Standards Act (FLSA) cases in Texas, claiming they were improperly classified as exempt employees under the Act. In both cases the legal assistants claim that they worked over 40 hours per week and were not paid the 150% of wages to which they were entitled under the FLSA. The most recent order is in Sherri L. Davis, et al., v. The Mostyn Law Firm, No. 4:11-cv-02874, U.S. District Court, Southern District of Texas (January 19, 2012). In that case the court conditionally certified a class comprised of all current and former salaried paralegal employees who worked more than a 40 hour week but were not paid 150% of their salary for overtime. The other case of interest is Betty Black v. Settlepou, PC, U.S. District Court, Northern District of Texas (February 14, 2011), in which that court also ordered conditional certification of a class comprised of paralegal employees at the Settlepou law firm.
Of course neither order deals with the essence of the claims as to whether or not the paralegals were properly classified as exempt under the Act. The orders are limited to a determination of whether or not the claimed members of the class were similarly situated and can be thus certified, which is a requirement for a class under Section 216(b) of the Act. The cases nevertheless should be watched to see how the federal courts in those two districts ultimately decide the overtime exemption issues regarding paralegals.
Sherri Davis claimed that she typically worked 70 hour weeks as a paralegal at the Mostyn Law Firm although she was only scheduled to work 40 hours per week, was classified as exempt and was not paid overtime. Betty Black claimed she was classified as exempt at the Settlepou firm, was paid on a salary basis, and did not receive overtime compensation, although her duties required her to work more than forty hours per week on a consistent basis, coming in early, working through lunch, and leaving late. Both claimants described work schedules not inconsistent with paralegals at many law firms.
Section 213(a)(1) of the Act exempts from overtime coverage those employees in bona fide executive, administrative, or professional capacities. That will be the gist of the cases should they come to trial. Were the paralegals in the classes managerial employees, and what constitutes a professional employee with regard to paralegals? These cases, and others that could be filed, will be of interest to all management in the legal and support industry that employ paralegals.