Contract lawyers who review documents may be entitled to FLSA overtime

Here's an interesting Fair Labor Standards Act case that says that contract attorneys who perform document review for large law firms are entitled to overtime pay.

The case is Lola v. Skadden Arps, decided on July 23. Skadden Arps is one the largest law firms in the world. Like many large firms, it hires lawyers to review the thousands of documents that might be relevant in the high-stakes litigation that these firms engage in. He was not paid overtime, however. This is a potential class action suit, by the way.

Under the FLSA, employers have to give you overtime if you work more than 40 hours per week. But the FLSA has many exceptions, including one that says professionals are not entitled to overtime. Are contract attorneys like Lola who review documents entitled to overtime? Here is how the Court of Appeals (Pooler, Lohier and Droney) summarizes plaintiff's position:

Lola alleges that his work was closely supervised by the Defendants, and his “entire responsibility . . . consisted of (a) looking at documents to see what search terms, if any, appeared in the documents, (b) marking those documents into the categories predetermined by Defendants, and (c) at times drawing black boxes to redact portions of certain documents based on specific protocols that Defendants provided.” Lola further alleges that Defendants provided him with the documents he reviewed, the search terms he was to use in connection with those documents, and the procedures he was to follow if the search terms appeared. Lola was paid $25 an hour for his work, and worked roughly forty‐five to fifty‐five hours a week. He was paid at the same rate for any hours he worked in excess of forty hours per week. Lola was told that he was an employee of Tower, but he was also told that he needed to follow any procedures set by Skadden attorneys, and he worked under the supervision of Skadden attorneys. Other attorneys employed to work on the same project performed similar work and were likewise paid hourly rates that remained the same for any hours worked in excess of forty hours per week.

Lola did not perform much in the way of "professional" services, did he? Defendant says he was a licensed attorney engaged in the practice of law. The Second Circuit sides with Lola, saying that, as a matter of North Carolina law, where Lola lived and worked, he really was not exercising legal judgment in reviewing documents under Skadden Arps' direction. The Court says:

The gravamen of Lola’s complaint is that he performed document review under such tight constraints that he exercised no legal judgment whatsoever—he alleges that he used criteria developed by others to simply sort documents into different categories. Accepting those allegations as true, as we must on a motion to dismiss, we find that Lola adequately alleged in his complaint that he failed to exercise any legal judgment in performing his duties for Defendants. A fair reading of the complaint in the light most favorable to Lola is that he provided services that a machine could have provided. The parties themselves agreed at oral argument that an individual who, in the course of reviewing discovery documents, undertakes tasks that could otherwise be performed entirely by a machine cannot be said to engage in the practice of law.

Did you catch that? The Court of Appeals says a machine could have performed Lola's duties. That's gotta hurt. These contract lawyers would probably rather be actually practicing law, not sitting in a windowless room reviewing boxes of documents. But the work is sufficiently unexciting and tedious that no one at the law firm wants to do it. So they hire lawyers to do the work on an hourly basis. While these lawyers may feel like they are not living up to their potential, they may be entitled to overtime under the FLSA.