Kadden v. VisuaLex, LLC, No. 11-CV-4892 (S.D.N.Y. Sept. 24, 2012).
The Federal District court for the Southern District of New York recently determined that a law school graduate employed as a graphic consultant was not exempt from the overtime requirements of the Fair Labor Standards Act (“FLSA”). In Kadden v. VisuaLex LLC, the Court examined whether the Plaintiff’s primary duties as a Litigation Graphics Consultant qualified as an exemption under the FLSA, and thereby disqualified her from the overtime pay requirements. Kadden had earned a Juris Doctor in 2001 and was later employment by VisuaLex from 2008 through 2011.
The offer letter sent by the Defendant indicated that Kadden’s starting salary was $75,000 per annum and that she would receive time-and-half for all hours worked above forty hours a week. In 2009, VisuaLex suspended overtime pay in response to the financial crisis. VisuaLex did not anticipate any problems with the suspension, as it believed that graphic consultants were exempt from the overtime requirements of the FLSA. Furthermore, VisuaLex argued that Kadden was exempt from such requirements under the creative professional exemption, the administrative employee exemption and the learned professional exemption of the FLSA.
In analyzing the issue, the Court recognized that the FLSA exemptions are to be “construed narrowly against the employer seeking to assert them and that the employer bears the burden of proving that employees are exempt.” The Court examined each exemption as it applied to the primary duties performed by Kadden.
The creative professional exemption allows an exemption for work “requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor as distinguished from work that primarily depends on intelligence, diligence and accuracy.” After a discussion of the Plaintiff’s daily tasks, the duties listed in her job description, and the context of her employment Offer Letter, the Court determined that the majority of tasks performed by Kadden in light of the evidence presented did not require imagination or originality and therefore her duties did not fall within the creative professional exemption.
Next the Court examined the learned professional exemption, which requires that the work performed utilize (1) “advanced knowledge (2) in a field of science or learning (3) that is customarily acquired by a prolonged course of specialized intellectual instruction.” In particular, the exemption applies where a prerequisite for entrance in the field requires specialized academic training. Although VisuaLex argued that Kadden was hired in part based on her advanced degree and knowledge in the field of law, the Court held that the relevant inquiry is whether the work performed by the employee required advanced knowledge. The Court found that the duties performed by Kadden on a daily basis and those listed in the Offer Letter did not require specialized training sufficient to meet the exemption.
In examining the administrative employee exemption the Court considered if Kadden’s primary duty “(1) is the performance of office or non-manual work directly related to the management or general operations of [Visualex] or [Visualex's] customers and (2) includes the exercise of discretion and independent judgment with respect to matters of significance.”  The Court determined that Kadden’s work largely centered on generating presentations and therefore, resembled production or sale as opposed to actually running the business. Additionally, Kadden did not exercise independent judgment or discretion on matters significantly relating to the administration of VisuaLex.
In general, where an employee does not meet any of the above exemptions, the employee may still be classified as exempt from the overtime requirements if they “perform a combination of exempt duties as set forth in the regulations.” This is known as the so-called combination exemption. That is, “an employee performing duties that fall under more than one individual exemption, none of which separately represents her primary duty, may be exempt under the combination exemption if those duties, when combined, constitute her primary duties.”
The Court, however, held that such a combination did not apply in this circumstance, as Kadden’s duties did not qualify under the creative or learned professional exemption.
Ultimately, after the two-day bench trial, Judge Scheindlin found that Kadden was a non-exempt employee under the FLSA and NYLL, and was thus entitled to unpaid overtime in the form of one and one-half times her hourly rate for all hours worked per week above forty.
A special thanks to Sean R. Gajewski and Cynthia Thomas, law clerks in our litigation department at Cullen and Dykman LLP, for help with this post.