California Labor &
Employment Law Blog
Jun 20, 2011

Unlicensed Accountants May Qualify for Overtime Exemptions

Topics: Class Actions, Court Decisions, Wage & Hour Issues

In Campbell v. PricewaterhouseCoopers (PwC),plaintiffs, a classof some2,000unlicensed junior accountants, sued their employer under California law for alleged unpaid overtime wages. Plaintiffs filed a motion for summary judgment,asking the court to find, as a matter of law, thatplaintiffs wereentitled to overtime compensation as they did not qualify for any overtime exemption. PwC opposed the motion,arguing that there weretriable issues of fact and that the plaintiffsqualified for theprofessional and/oradministrative exemptions. Thedistrictcourt disagreed, holding that unlicensed accountants are categoricallyineligible forthe professional exemption and thatthere was insufficient evidence to support a finding that they met the administrative exemption.

The Ninth Circuit disagreed.With respect to the professional exemption, the court held thatunlicensed accountants are not categoricallyineligible forthe exemptionsimplybecause of their unlicensed status.The court held that unlicensed accountants mayqualify as "learned professionals." The court did not go so far as to holdthat the plaintiffs in this case actually qualifiedfor the exemption asa matter of law, but rather held that the plaintiffs, orsome of them, could qualify depending on their actual job duties and thus the district court had erred in ruling that no unlicensed accountant could qualifyfor the professional exemption inany circumstance. According to the court, such a holding "ignore[s] the potential for substantial variance [in job duties] from one unlicensed accountant to another."The courtemphasizedthat "[e]ach case will require afact-specific inquiry into whether the unlicensed accountant meets the subsection's various benchmarks--e.g.,engaging in work that is 'predominantly intellectual and varied in character." The court held that the evidencebefore it revealed significant differences in skill level, responsibility and experience among theclass member accountants.

With respect to the administrative exemption, the court similarly concluded that PwC had demonstrated a triable issue of fact regarding the plaintiffs' actualjob duties and whether they met the test for the exemption.The court specifically noted conflicting evidence on the issues of whether plaintiffs performed work under only general supervision and whether their work was of substantial importance to their employer's clients. The court heldthat these factual issues had to be decided by a jury and that the districtcourt had erred in deciding, as a matter of law, that the unlicensed accountants did not qualify forthe administrative exemption.

The Ninth Circuit's decisionis a favorable one for California employers, both on thescope of the professionaland administrative exemptions, and for purposesof trying to defeat class certification given the substantial focus of thedecision on the need toindividually examine whether a particular employee qualifies forexempt status based on a review of the employee's actual job duties and how the employee spends his or her time.

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