Settlement Reached in Lawyer Overtime Pay Suit

document_reviewIs a contract lawyer who performs mindless document review entitled to overtime pay under the Fair Labor Standards Act? Maybe so, but a December 2015 settlement moots adjudication of the issue.

In September 2014, the U.S. District Court for the Southern District of New York dismissed a lawyer’s claim against his former employers for overtime pay that he believed he had accumulated while performing document-review work. The lawyer, David Lola, filed a class action suit against both the law firm for which he performed the document-review work and the legal staffing agency that found him the job. Lola claimed that because document review was mechanical and could be done by a paralegal, he was not engaged in the “practice of law” and was eligible to receive overtime pay for his work. The district court concluded that as a licensed lawyer engaged in the practice of law, Lola was exempt from the Fair Labor Standards Act’s overtime-pay requirements. See Lola v. Skadden, Arps, Slate, Meagher & Flom LLP, No. 13-cv-5008 (RJS), 2014 BL 256521 (S.D.N.Y. Sept. 16, 2014).

On July 23, 2015, the Second Circuit reversed. See Lola v. Skadden, Arps, Slate, Meagher & Flom LLP, No. 14-3845 (2d Cir. Jul. 23, 2015). Said the court, a document-sorting machine does not exercise professional judgment and, therefore, does not function as a lawyer:

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. We therefore vacate the judgment of the district court and remand for further proceedings consistent with this opinion.

After remand to the district court, the parties settled in December 2015 with a $75,000.00 payment by Skadden Arps and a staffing agency. See ABA Journal, Skadden, Staffing Agency OK Payment of $75K to Doc-Review Lawyer Trio to Settle Overtime Suit (Dec. 16, 2015); see also ABA Journal, Was a Contract Lawyer for Quinn Emanuel Entitled to Overtime Pay? Judge Hears Arguments (Oct. 23, 2015).

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