On July 23, 2015, the Second Circuit, in Lola v. Skadden, Arps, Slate, Meagher & Flom LLP, Tower Legal Staffing, Inc., revived a putative collective action brought by David Lola, a contract attorney, against Skadden and Tower Legal Staffing, Inc., alleging violations of the overtime provisions of the Fair Labor Standards Act.  The Second Circuit held that the plaintiff adequately pled that document review may not necessarily constitute “practicing law” under North Carolina law.

Plaintiff David Lola, a contract attorney, conducted document review for Skadden in 2012 and 2013 in connection with a multi-district litigation.  Lola alleged that his document review was closely supervised and primarily consisted of:

• looking at documents to see what search terms appeared;

• categorizing those documents into predetermined categories; and

• redacting documents based on specific protocols.

Lola was paid $25 an hour and generally worked between 45 and 50 hours per week.  He was classified as exempt under the FLSA and therefore did not not receive overtime pay.

Lola brought suit against Skadden and Tower Legal Staffing, Inc. as putative joint employers, on behalf of himself and similarly situated employees, alleging that he was misclassified as exempt  under the FLSA and seeking overtime pay.  While attorneys generally qualify for the FLSA’s professional exemption, Lola alleged that he and other contract attorneys performing document review for Skadden were not engaged in the practice of law because they “performed document review under such tight constraints that [they] exercised no legal judgment whatsoever.”  The defendants moved to dismiss the complaint, arguing that  Lola, as an attorney, was exempt under the FLSA’s professional exemption.

The district court granted the defendants’ motion to dismiss Lola’s complaint.  The court first found that the definition of “practice of law” is “primarily a matter of state concern,” and that because Lola resided at all relevant times in North Carolina, that state’s law should apply when analyzing whether he was practicing law under the FLSA.  The court then concluded that Lola was engaged in the practice of law under North Carolina law, and therefore an exempt employee under the FLSA.  Lola appealed the decision to the Second Circuit.

As a threshold matter, the Second Circuit agreed with the district court that North Carolina law should control the question of whether Lola was practicing law within the meaning of the FLSA’s professional exemption.  Constrained to accept the allegations in the complaint as true for purposes of the defendants’ motion to dismiss, however, the Court of Appeals disagreed with the district court’s conclusion that by undertaking the document review he was hired to conduct Lola was necessarily “practicing law” within the meaning of North Carolina law. To the contrary, the Second Circuit found that if all facts pled by Lola are taken as true, and he “provided services that a machine could have provide,” then he was not “practicing law” within the meaning of the FLSA and therefore did not qualify for the professional exemption.  For this reason, the Court of Appeals vacated the judgment of the district court dismissing the complaint, and remanded the case for further proceedings.