Paralegal Overtime Case
This may be a rare occurrence in Georgia employment law, but a federal court in New York has just ruled that a paralegal who also worked as an independent contractor, both positions being with the same firm, does not fall under the ““highly compensated employee” overtime exemption of the FLSA, even though her firm paid her in excess of $100,000 per year.
The case, Magnoni v. Smith & Laquercia, S.D.N.Y., No. 07-9875, (9/11/09), arose under a set of circumstances that may be apart from the norm, but it is certainly informative.
The paralegal in question, Renata Magnoni, worked for the New York PI law firm of Smith & Laquercia. She began at the firm as a litigation paralegal in 1990. In 1997, she started an independent business as a process server and court filer, a firm that was hired as an independent contractor by the Smith law firm.
She became a salaried employee with no overtime compensation in 2003. From then until she was fired in 2007, she earned around $50- 60,000 in salary, supplementing her income from the Smith firm with her independent contractor work. Her total compensation from the firm exceeded $100K, although her paralegal salary was always less than that.
Magnoni filed suit in November 2007 after her termination, asking for overtime worked from 2003- 2007.
Smith’s Motion for Summary Judgment was based upon the theory that the combination of the two incomes from the firm placed Magnoni in the highly compensated employee under the FLSA (29C.F.R. § 541.601(a)).
The court disagreed, saying that, “[T]he language of § 541.601 leaves no doubt that it applies only to an employee's total annual compensation; indeed, under the FLSA, independent contractors are exempt from overtime requirements. Therefore, Magnoni's compensation for her independent contractor responsibilities cannot be considered part of her total annual compensation as S & L's employee under the FLSA.”
The court further rejected the firm's attempts to blur the lines between her paralegal duties and duties performed for the firm as an independent contractor.
“[I]t would be antithetical to the spirit of the FLSA to consider payment received as an independent contractor to constitute “employee” compensation, particularly given the mandate that exemptions should be narrowly construed against employers,” the court said.
While there is no way to tell either how the trial will go, or how a Georgia court or whether the 11th Circuit would agree, this seems pretty strong language on this point. If you are in this position, you would do well to contact a Georgia employment lawyer.
You can read the entire case here.
