In November of 2009 we wrote about Campbell v. Pricewaterhousecoopers, LLP, 602 F. Supp. 2d 1163, 1181 (E.D. Cal. 2009), which held that, as a matter of law, a putative class of unlicensed accounting professionals employed by PricewaterhouseCoopers LLP are precluded from exemption from California overtime requirements under the Professional Exemption and the Administrative Exemption set forth in California Wage Order 4-2001.
The issue was certified and accepted for interlocutory appeal, and we filed an Amicus Curiae Brief on behalf of the American Institute of Certified Public Accountants addressing some of the issues raised by the District Court. The Ninth Circuit issued its Opinion yesterday and the panel reversed the District Court’s findings on these key issues. The panel was mindful of the potential impact of its ruling:
The district court found that unlicensed accountants are categorically ineligible for the exemption as a matter of law, and thus Plaintiffs cannot fall under the exemption because they are not licensed CPAs. This conclusion is contrary to the exemption’s text and structure and would produce highly problematic precedent affecting several non-accounting professions. For that reason, we tread carefully in our analysis of the issue.
The first holding construes the Professional Exemption, Cal. Code Regs. tit 8 § 11040(1)(A)(3), which provides for exemption under two separate paths—i.e., the “Enumerated Professions Exemption” (which requires candidates to be licensed) and the “Learned Professions Exemption” (which requires no license). Departing from the lower court, the Ninth Circuit held that the paths are not mutually exclusive. And it noted the consequences of a contrary holding:
[The lower court’s holding] would create significantly troubling results. For example, California employers would likely have to pay mandatory overtime to the following hypothetical professionals: a recent medical-school graduate working as a resident at a hospital; a first-year associate at a California law firm who has taken the California bar exam but not yet received his results; a law clerk on the Supreme Court of California who is waiting until after her clerkship to take the bar exam; a senior associate at a New York law firm who temporarily relocates to the firm’s California office to handle a trial pro hac vice;or a Chicago lawyer who moves to California to do in-house work for a California corporation.
The second holding, related to the administrative exemption, rejects the district court’s finding that unlicensed accounting professionals work under more than “general supervision.” Here, the Court cited to our brief for the proposition that the AICPA’s Professional Standards say nothing about whether that supervision must exceed mere “general” supervision.