NORTH BAY – The San Francisco First District Court of Appeals ruling Aug. 17, that a former law clerk is not entitled to overtime pay, has raised questions about how it applies to other professional practices.

The plaintiff in this case was Matthew Zelasko-Barrett, currently an attorney in Petaluma, who was a former law clerk at Brayton-Purcell LLP of Novato.

His complaint sought to collect alleged back overtime pay from Brayton-Purcell, even though he was not licensed to practice law during the time he was employed there.

During this period, Brayton-Purcell classified Mr. Zelasko-Barrett as an exempt professional employee.

The initial trial court judge dismissed the case and the plaintiff appealed.

The First District Court’s opinion, written by Justice Stuart Pollak, said that Mr. Zelasko-Barrett’s work fell under the “professional exemption” clause of the Labor Code and that he was engaged in a “learned profession.”

This is an exemption under the code, and, therefore, Mr. Zelasko-Barrett was exempt from overtime compensation and other benefits afforded only to non-exempt employees.

At the time, Mr. Zelasko-Barrett had graduated from the Thomas Jefferson School of Law but was still awaiting admission to the bar. His suit claimed that he was entitled to overtime pay because Brayton-Purcell had incorrectly classified him as employed in a professional capacity.

The appellate court agreed with the trial court and also ruled in favor of Brayton-Purcell, saying that the plaintiff, as an unlicensed law clerk, met the conditions for exemption by performing intellectual work for the law firm.

California professionals, such as lawyers and CPAs, are exempt from wage regulations that mandate meal breaks, rest periods and overtime compensation under Section 515a of the state’s Labor Code.

This law allows exemptions for administrative, executive or other professional employees who “customarily and regularly exercise discretion and independent judgment – and who also earn a monthly salary no less than two times the state minimum wage for full-time employment.”

The decision was also in keeping with California’s Industrial Welfare Commission’s 1989 order that extended the exemption from overtime benefits to all those in “learned professions,” not just licensed members of certain categories like law, medicine and engineering.

“In this particular case, Mr. Zelasko-Barrett was exercising discretion and doing things an associate attorney would do except for having final approval,” according to Lloyd Leroy, a partner at Brayton-Purcell. “We classify our law clerks in two categories. Law Clerk I refers to first- or second-year laws school students looking for work experience. They are entitled to overtime. Law Clerk II refers to those who have completed law school and have not yet passed the bar but are engaged in intellectual work. This group is not eligible for overtime.”

While the finding in this case appears to be straight forward, to some it leaves room for interpretation and further review.

“I thought Mr. Zelasko-Barrett would have been found to be entitled to overtime pay since he didn’t have a license to practice law,” said Michael G. Miller, a partner in the law firm of Perry, Johnson, Anderson, Miller & Moskowitz in Santa Rosa.

“The opinion doesn’t address someone doing clerical work at a law firm while still in law school. Some law clerks don’t make independent judgments. It really depends on their specific duties and a factual analysis of what a specific person does on a daily basis. In the case of paralegals, for example, there has been a ruling allowing them to be eligible for overtime pay.”

According to Robert Holder, partner with Brown Holder Alfaro & Co., LLP, a CPA firm in St. Helena, there is a difference between a law degree and a B.A. degree from a business school.

“This decision raises questions about how it applies to accounting firms and how comparable it is to employees with college degrees who are not CPAs.”

He said it is a common practice to pay overtime, as well as other forms of compensation, such as bonuses. “The question is how will the California Department of Industrial Relations interpret this ruling when handling claims.”

Greta Hoversten, a principal with Ghirardo CPA in Novato, says: “we are very careful about how we classify our professional employees. If they do not have a CPA or EA certification we generally consider them to be non-exempt, but the specific determination depends on their actual responsibilities.”

At the end of the day, the issue turns more on the policy of a professional firm to grant or not to grant overtime beyond those considered to be non-exempt, but that overtime cannot be considered as mandatory -- or an entitlement -- for exempt employees. The legal litmus test appears to be the type of work an individual does on a daily basis.